Calif. Paint Company Owner Pleads Guilty to Tax Fraud; Paid Undocumented Workers

durabilityanddesign.com
Friday, November 18, 2011

The owner of a residential and commercial painting business in Santa Clara, Calif., has pleaded guilty to tax fraud after the Internal Revenue Service said he paid nearly $2 million in cash to illegal immigrants using secret bank accounts.

From 2003 to 2005, Insoo Kim, 57, of Cupertino, Calif., maintained separate business bank accounts for his company, Melody Painting Company, hiding three of them from his accountant and the federal government, the Northern District of California U.S. Attorney’s office said in a news release.

In 2006, the IRS audited Kim and his wife. During the investigation, the IRS found $200,000 unaccounted-for funds in the accounts Kim disclosed; however, the business owner maintained that he provided all records. The funds prompted further investigation, prosecutors said.

In 2007, the IRS issued a series of summons to various banks for Kim’s account information; it was then that he admitted to keeping three additional accounts that totaled $1.907 million.

“Kim explained that he hired some undocumented painters and paid them in cash from those accounts,â€