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Press Release

Former Parker and Denver Massage Parlor Owner Sentenced for Obstructing the IRS

For Immediate Release
U.S. Attorney's Office, District of Colorado

DENVER – Jung Yoon Choi, age 56, formerly of Aurora, Colorado was recently sentenced by U.S. District Court Judge Robert E. Blackburn to serve 19 months in federal prison followed by one year of supervised release for obstructing and impairing the laws of the Internal Revenue Service, announced Acting United States Attorney Bob Troyer and IRS Criminal Investigation Special Agent in Charge Steven Osborne. 


Choi waived her right to indictment by a federal grand jury and was charged by information on October 2, 2015 for obstructing and impairing the laws of the Internal Revenue Service and pled guilty to this charge on January 14, 2016.  As part of the plea agreement, Choi has agreed to forfeit $118,575.00 seized on December 17, 2010.  She was also ordered to pay $67,560 in restitution to the IRS. 


According to the information and plea agreement, from January 1, 2009, through December 31, 2010, Choi owned and operated three massage parlors in the Denver Metropolitan area, specifically; Ivy Spa located at 2260 S. Quebec Way, Denver, CO (during 2009); New Image Spa located at 17783 Cottonwood Drive, Parker, CO (during 2010); and Blue Pine Spa located at 6212 East Pine Lane, Douglas County, CO (during 2010).


Choi typically staffed each of her spas with an on-site manager and a number of workers who provided services to customers.  The primary service provided by her workers was giving massages.  Each of the spas typically had a fee schedule according to which customers paid a door fee ordinarily ranging from $40 to $50, depending on the amount of time requested (30 to 60 minutes were the norm).  In addition, customers at the various spas often paid an additional fee which was characterized as a “tip” in many instances for “extra services” provided by Choi’s workers.  At times, the “extra services” consisted of prostitution services in violation of Colorado Revised Statute, 18-7-201.  Specifically, the workers would engage in sexual acts with customers in exchange for money.  Choi was aware that prostitution was occurring at times in each of her spas and that business income was being generated from such activity.  Choi regularly advertised for her spas using Westword newspaper and  Choi paid the owner of, David Warmack, a monthly fee to post favorable reviews on his website touting her various businesses and the women who worked there.  Warmack was previously prosecuted by the U.S. Attorney’s Office and was sentenced to serve 15 months in federal prison by U.S. District Court Judge Christine M. Arguello for related criminal activity.


Choi generated substantial income from each of her spas for tax years 2009 to 2010.  However, she failed to file personal income tax returns for 2009 and 2010, and thus she did not report her business income for either year and she did not pay any taxes to the IRS.  In addition to not filing tax returns and not paying taxes, Choi further impeded the IRS’s collection of taxes by several means, including:  using nominees on bank accounts so as to conceal her business income; conducting cash and business transactions using nominees; conducting financial transactions in amounts that were less than $10,000 so as not to trigger the filing of currency transaction reports; and hiding and storing income in the form of cash hoards at various locations.


IRS Special Agents conducted a financial analysis of the Ivy Spa bank account for 2009 and the account showed deposits totaling $118,418.  The vast majority of such deposits, $106,322, came from credit card payments from customers at Ivy Spa.  The $118,418 in funds deposited into this account represented gross income generated by Choi for tax year 2009.


Choi also utilized nominees to conduct financial transactions in bank accounts for New Image Spa and Blue Pine Spa in 2010. Choi received substantial business income from New Image and Blue Pine Spa throughout 2010 in the form of cash and credit card deposits which she concealed.  She regularly took a portion of her cash earnings and secreted the funds in cash hoards at various locations. Particularly, on December 17, 2010, pursuant to a federal search warrant, IRS Special Agents seized approximately $118,575, in cash from a locker at the U-Store-It.  In total, Special Agents seized $219,388 in cash from Choi or her associates in late 2010.   Such funds represented gross, business income which Choi generated during 2010.


            “You have to pay taxes, regardless of your profession,” said Acting U.S. Attorney Bob Troyer.  “Thanks to the exceptional work by our prosecutors and IRS CI and FBI agents, Ms. Choi will suffer a righteous consequence for evading that duty.”


“The privilege of living in the United States carries certain responsibilities, one of which is the voluntary payment of taxes,” said Kareem Carter, Acting Special Agent in Charge, Denver Field Office, Internal Revenue Service – Criminal Investigation.  “The prosecution of individuals, such as Choi, who intentionally conceal income and evade taxes, is a vital element of IRS-CI’s enforcement strategy of holding people accountable for their criminal actions.”


            This case was investigated by Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, the Los Angeles Police Department and the Arapahoe County Sheriff’s Office.  The case was prosecuted by Assistant United States Attorney Tim R. Neff.

Updated November 17, 2016