Owners & Operators Of Mid-State Restaurants Plead Guilty In Scheme To Harbor Undocumented Workers
For Immediate Release
U.S. Attorney's Office, Middle District of Tennessee
Forfeiture Includes Four Houses, $434,400 Cash, & Bank Accounts Totaling $412,000
NASHVILLE – Five persons charged last year in an undocumented worker harboring scheme connected to eight mid-state restaurants, have pleaded guilty, announced Acting U.S. Attorney Thomas J. Jaworski.
In plea hearings concluded this week, Zhongzhi “Tommy” Zhuo, 46, Jianping “Alan” Zhuo, 37, both of Hendersonville, Tenn., and Jianhua “Jason” Zhuo, 35, of Gallatin, Tenn., pleaded guilty to conspiracy to harbor aliens; conspiracy to commit money laundering; and conspiracy to defraud the United States by failure to collect and pay employment taxes to the IRS. Zhongzhi Zhuo also pleaded guilty to two counts of harboring aliens, and failure to pay employment taxes. Lili Wu, 32, of Gallatin, pleaded guilty to conspiracy to defraud the United States by failure to collect and pay employment taxes to the IRS. Xiaofen “Joyce” Zhuo, 38, of Hendersonville, pleaded guilty in February to conspiracy to defraud the United States by failure to collect and pay employment taxes to the IRS.
“These defendants profited by exploiting and concealing the existence of vulnerable people,” said Acting U.S. Attorney Jaworski. “I commend our law enforcement partners for their tireless efforts to bring them to justice and to remove individuals from circumstances in which they were exploited.”
According to records filed with the Court, the defendants participated in a scheme to harbor persons who were in the United States illegally, by providing a means of financial support through employment at the restaurants and providing them with housing and transportation. The scheme also involved paying undocumented workers in cash to avoid paying employment taxes and to conceal the ongoing fraud. The restaurants identified in the indictment include the Fuji Japanese Steakhouse, with locations in Hendersonville, Goodlettsville, and Whitehouse, Tenn.; Bonfire Mongolian Grill, with locations in Hendersonville, Clarksville, Mount Juliet, and Spring Hill, Tenn.; and the Koi Japanese Steakhouse in Gallatin, Tenn. Some of the restaurants are under new ownership.
These guilty pleas follow a nine-count indictment returned by a federal grand jury in July 2022, after which all defendants were arrested by federal agents.
The defendants also agreed to forfeit residences that were used to facilitate violations of these crimes and funds derived from the commission of these crimes. As a result, defendants agreed to forfeit nine bank accounts totaling approximately $412,209.14; U.S. currency totaling $434,400.24; and the properties at 138 Huntington Place, Hendersonville, Tenn.; 1119 Peninsula, Gallatin, Tenn.; 232 Trey Court, Clarksville, Tenn.; and 1050 Bradford Park Road, Mount Juliet, Tenn.
The United States also alleged that this scheme caused a tax loss to the IRS of $1,259,348 and will be seeking restitution.
“These employers exploited a vulnerable population and defrauded the government for their own profit. The guilty pleas are a prime example of the successful outcome when local, state, and federal partners collaborate to protect workers and American businesses,” said Special Agent in Charge Rana Saoud, HSI Nashville. “Through its investigations into exploitative employers, HSI protects the U.S. labor market, workplace conditions, and the dignity of individual workers, who are often taken advantage of through dangerous work conditions, underpayment, and using those noncitizens as a business model to maximize profits.”
“Unscrupulous businesses who willfully skirt their tax and legal workforce obligations must be held to account,” said IRS CI Special Agent in Charge Donald “Trey” Eakins. “Employers who deliberately deflect these obligations undermine what is owed to the U.S. government in payroll taxes and other fees, in addition to creating an unfair economic advantage over law-abiding business owners who play by the rules.”
The defendants face between five and 20 years in prison when they are sentenced later this year. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by Homeland Security Investigations; IRS-Criminal Investigation; the Tennessee Bureau of Investigation; and the Hendersonville Police Department. Assistant U.S. Attorney Robert S. Levine is prosecuting the case.
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Public Affairs Officer
Updated May 10, 2023
Labor & Employment