Owner Of Queens Karaoke Bar Pleads Guilty To Failure To Pay Employment Tax
A resident of Queens, New York, pleaded guilty today to failing to collect and pay over employment tax, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents, Kae Wook Lee was the sole owner and chief executive officer of Mona Lisa 7 Corporation, through which he operated a karaoke bar in the Flushing neighborhood of Queens. Between 2011 and 2013, Lee diverted part of his karaoke business’s receipts to bank accounts in the names of shell corporations he created. Lee then withdrew funds from those bank accounts to pay employees’ wages in cash without collecting or paying over employment taxes to the Internal Revenue Service (IRS). Lee concealed the cash payroll from his accountant and signed and filed false tax returns that underreported employee wages. The tax loss to the IRS caused by the defendant’s conduct was $612,500.
U.S. District Judge I. Leo Glasser scheduled sentencing for September 6, 2018. Lee faces a statutory maximum sentence of five years in prison, as well as a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Mark Kotila and Sean Green, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts can be found on the division’s website.