Owner of Food Service Firm Operating in Government Buildings Throughout the D.C. Area Sentenced to Prison for Payroll Tax Fraud
Did Not Pay More Than $10 Million in Taxes
A Potomac, Maryland, owner of companies providing food services in government buildings was sentenced to 21 months imprisonment for not paying more than $10 million in employment and sales tax, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and Acting U.S. Attorney Michael R. Sherwin for the District of Columbia.
According to documents and information provided to the court, Steve Choi was the founder, president, and operator of nine companies that provided food services within government buildings located in the D.C. area, including the Department of Justice, the Department of Agriculture, the Department of Energy, the Department of Commerce, NASA, and the Library of Congress, among other locations.
As president and operator of the companies, Choi was responsible for collecting and paying employment taxes to the IRS. Notwithstanding these obligations, and civil collection efforts from the IRS, from 2012 through 2015, Choi collected tax withholdings from his employees’ wages, but did not pay over $4.4 million in employment taxes. During the same period, Choi also did not pay more than $6.2 million in sales taxes to the D.C. Office of Tax and Revenue. Rather than pay the sales and employment taxes, from 2011 through 2015, Choi directed his companies to pay millions of dollars in other expenditures, including over $1 million in personal salary, personal donations, and cash advances.
On Feb. 7, 2020, Choi pleaded guilty to employment tax fraud.
“As an employer, Choi had a legal obligation to pay over the money withheld for taxes on behalf of his employees,” said IRS-Criminal Investigation (CI) Special Agent in Charge Kelly R. Jackson. “CI will continue to investigate those who choose to utilize their companies’ payroll tax withholdings for their personal benefit.”
In addition to the term of imprisonment, U.S. District Judge Ketanji Brown Jackson ordered Choi to serve three years of supervised release and to pay approximately $6,390,182 in restitution to the Office of Tax and Revenue and $4,737,809 in restitution to the United States.
Principal Deputy Assistant Attorney General Zuckerman, Acting U.S. Attorney Sherwin, and IRS-CI Special Agent in Charge Kelly R. Jackson thanked special agents of IRS-CI and Office of Tax and Revenue who investigated the case, and Trial Attorneys Jack Morgan and Eric Schmale of the Tax Division, as well as Assistant U.S. Attorney Veronica Sanchez, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.