West Hartford resident William Chen, part owner of multiple restaurants in Connecticut and Massachusetts, has been sentenced after pleading guilty to an extensive tax fraud scheme.
By Ronni Newton
Officials announced Wednesday that William Chen, 49, of West Hartford, was sentenced by U.S. District Judge Stefan R. Underhill in Bridgeport to 18 months in prison followed by a year in of supervised release, and has also been ordered to pay a $20,000 fine.
In July 2022, Chen waived his right to be indicted and pleaded guilty in federal court in Bridgeport to two counts of filing a false tax return in a tax fraud scheme that resulted in underpayment of more than $2 million in taxes by restaurants in Connecticut and Massachusetts that he owns and operates.
Chen is a resident of West Hartford and part owner of Kaliubon Ramen in West Hartford and Wethersfield, as well as part owner of Ginza Japanese Restaurant in Bloomfield, Ginza Japanese Cuisine in Wethersfield, and Feng Asian Bistro in Hartford, Canton, and Millbury, MA.
According to the U.S. Attorney’s Office, which referenced court documents and statements made in court, Chen purchased, used, and trained staff on the operation of a Point-of-Sale (POS) system for restaurant orders at the establishments he owned and operated, and he also paid a fee to activate “zapper” software that deliberately deletes transactions from the POS system.
Fraudulent records were created by Chen and others who worked at the restaurants through the use of the zapper software to delete cash transactions from the POS system from approximately 2013 until 2020, officials said.
Chen was also responsible for maintaining the accounting and financial records at the restaurants as well as for collecting and withholding employment taxes, and he presented the fraudulent records to the accountant who prepared the restaurants’ tax returns – which were then signed by Chen.
In addition, “For the 2013 through 2020 tax years, Chen failed to withhold, account for, and pay to the IRS federal income taxes, Federal Insurance Contributions Act taxes (‘FICA’), and federal unemployment taxes for multiple employees that he paid, or that he knew were paid, in cash,” officials said.
The total value of tax loss that has been attributed to Chen’s actions is $2,092,926.94. He has paid $600,000 in restitution thus far, officials said this week.
Chen had been free on his personal recognizance after pleading guilty. He is required to report to prison on April 5, 2023.
The Internal Revenue Service – Criminal Investigation Division investigated this case, and it was prosecuted by Assistant U.S. Attorney David T. Huang.
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