U.S. Attorney And Federal Law Enforcement Officials Announce Extradition Of Honduran Nationals In Fight Against Fentanyl Trafficking In The Tenderloin District Of San Francisco
SAN JOSE – Liping Liu pleaded guilty today to tax evasion, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez announced.
According to the plea agreement, Liu, 56, of Saratoga, was the receptionist and office manager for her spouse’s pediatric dental and orthodontic practice. Liu created a tax evasion scheme in which she skimmed money from various sources, including rental properties and her spouse’s dental and orthodontic practice. Liu admitted that knew her actions were against the law and she was evading the assessment and payment of federal taxes throughout the course of her scheme.
Liu evaded taxes by funneling money from the dental and orthodontic practice into the various bank accounts to prevent those funds from appearing in the business bank accounts. The only funds deposited into the business bank account were insurance payments, aside from thirteen personal checks in 2006 and one personal check in 2009. Liu deposited the insurance proceeds exclusively into the business accounts because she knew the insurance company reported these payments to the IRS. Liu offered a 10% discount to dental clients if they paid in cash or by check if they left the payee section blank. Liu wrote “cash” in the blank payee section or left it blank, then deposited the checks into the non-business accounts. Liu also modified checks, in the memo and payee fields to disguise the source of the payment. This enabled her to deposit the checks into the non-business account holder’s names.
In addition, according to her plea agreement, from 2006 through 2010, Liu was a 50% partner in a limited liability corporation, HSL, which was created to hold rental property. Liu diverted rental checks paid to HSL to non-business bank accounts for the purpose of evading taxes on the HSL entity. She also changed the payee information on numerous rental checks. From 2006 through 2010, Liu omitted $2,147,741.04 in gross receipts. This resulted in additional tax due and owing of $744,248. Liu provided incomplete and false information to the family bookkeeper
Liu also admitted to engaging in a series of structured cash transactions from September 2008 to September 2009, which allowed her to continue to hide taxes from the IRS.
Liu was charged on March 19, 2014, with one count of tax evasion. She pleaded guilty to the charge. Liu’s sentencing hearing is scheduled for September 15, 2014, at 9:00 a.m. before the Honorable Ronald M. Whyte, United States District Court Judge, in San Jose. The maximum statutory penalty for each count of tax evasion, in violation of Title 26, U.S.C § 7201, is five years in prison and a fine of $250,000.
Assistant United States Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.