Spa Owner Pleads Guilty to Payroll Tax Crimes
A Brookville, New York, man pleaded guilty today to willfully failing to collect and pay over employment taxes to the IRS on behalf of the spa companies he owned and managed.
According to court documents and statements made in court, Sung Soo Chon, 63, aka Steve Chon, was the CEO, president and majority owner of Spa Castle Queens in College Point, New York, and Spa Castle Texas, in Carrolton, Texas. Chon oversaw daily operations at the two spas and related businesses, and directed subordinates to pay cash wages to some employees, many of whom were not legally permitted to work in the United States.
From the first quarter of 2014 through the first quarter of 2017, Chon did not withhold all of the legally required federal payroll taxes from the wages of some of the spa employees and filed false employment tax returns with the IRS. During this period, Chon caused the businesses to conceal more than $1.3 million in cash wages. In total, the spa companies did not pay $199,238 in payroll taxes due to the IRS.
Chon is scheduled to be sentenced on Dec. 6. He faces a maximum penalty of five years prison, as well as a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Breon Peace for the Eastern District of New York made the announcement.
IRS-Criminal Investigation is investigating the case.
Assistant Chief Jorge Almonte and Trial Attorney Ann M. Cherry of the Tax Division are prosecuting the case.