San Francisco Restaurant Owner Indicted For Concealing Non-Payment Of Wages And Threatening Employees

SAN FRANCISCO - A federal grand jury in San Francisco indicted Ming Lian Zhou for making false statements to a government agency about paying his employees overtime wages and for threatening his employees with economic harm if they did not return their wages to him, announced Acting United States Attorney Brian J. Stretch and U.S. Department of Labor Office of Inspector General Special Agent in Charge Abel Salinas.

According to the indictment unsealed yesterday, Zhou, 57, of San Francisco, was the partial owner and manager of Hong Kong Lounge I and Hong Kong Lounge II, dim sum restaurants located in San Francisco.  The Department of Labor (DOL) determined in 2012 that the restaurants had underpaid 48 employees by over $90,000.  The DOL directed Zhou and the restaurants to pay this money to the employees and then certify to DOL that they had been paid.  Zhou allegedly submitted signed forms to DOL stating that he had paid the employees, but in reality, Zhou had not paid any of the employees.  Zhou then allegedly directed his employees to tell DOL they had been paid when, in fact, they had not.  The indictment further alleges that in 2013, DOL learned of Zhou’s failure to pay the employees as directed and, as a result, required Zhou to provide the money directly to the DOL; in such cases, DOL can issue checks directly to the underpaid employees.  The indictment alleges that Zhou provided the money to DOL but then directed his employees to cash the checks that they received from DOL and to give the money back to him.  Zhou allegedly reduced hours, changed employee schedules, and terminated employees who failed to comply with his instructions to kick back their wages.  Zhou was charged with concealing a material fact from a government agency, in violation of 18 U.S.C. § 1001(a)(1), and interfering with commerce by threats of economic harm, in violation of 18 U.S.C. § 1951.

Zhou made his initial appearance in San Francisco before U.S. Magistrate Judge Sallie Kim.  He appeared before Judge Kim again today for arraignment and identification of counsel.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  Zhou faces a maximum sentence of 5 years’ imprisonment if convicted of concealing material facts from a government agency, and a maximum sentence of 20 years’ imprisonment if convicted of interfering with commerce by threats.   Additional terms of supervised release, penalties, and restitution may be ordered upon conviction. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

The case is being prosecuted by Special Assistant U.S. Attorney Daniel P. Talbert with the assistance of Trina Khadoo.   The prosecution is the result of an investigation by the DOL’s Office of Inspector General and Wage and Hours Division.  This case originated with an investigation by the DOL’s Wage and Hours Division into whether restaurants in the Bay Area complied with the Fair Labor Standards Act.