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Press Release

Owner of Queens Karaoke Bar Sentenced to Prison for Failure to Pay Employment Taxes

For Immediate Release
Office of Public Affairs

A resident of Queens, New York, was sentenced today to 12 months and one day in prison for failing to collect and pay employment taxes, 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 some of his karaoke bar’s receipts to bank accounts held in the names of shell corporations he created. Lee then withdrew funds from those bank accounts to pay employees’ wages in cash without collecting, accounting for, or paying over employment taxes due to the Internal Revenue Service (IRS).  Lee concealed the cash payroll from his accountant and signed false tax returns that underreported employee wages and employment taxes owed.

In addition to the term of imprisonment imposed, the court ordered Lee to serve two years of supervised release and pay $612,500 in restitution to the IRS.

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.

Updated April 25, 2019

Financial Fraud
Press Release Number: 19-424