delmarvanow.com

June 3, 2008

OCEAN CITY: Restaurant owners plead guilty to tax evasion, employing illegals

Daily Times Staff Report

BALTIMORE — A couple who owned two restaurants in West Ocean City pleaded guilty today to tax evasion and employing illegal aliens in the U.S. District Court.

Bo Hao Zhu, 33, and wife Siu Ping Cheng, 30, both of Ocean City, owned an operated Miyako Sushi and Seafood Buffet and Panda China Buffet restaurants in West Ocean City.

Their firm, Zhu & Partners, LLC, pleaded guilty to alien harboring and inducing aliens to reside in the United States.

Zhu & Partners faces a fine of $250,000, or twice the gross gain or loss caused by its conduct, together with costs of prosecution.

Zhu faces a maximum sentence of five years in prison for employment tax evasion and a fine of $250,000, or twice the gross gain or loss caused by his conduct, together with costs of prosecution.

Cheng faces a maximum sentence of six months in prison for unlawful employment of illegal aliens and a fine of $3,000 for each unauthorized alien employed.

As part of their plea agreement, the defendants agreed to forfeit their interests in the Miyako property at 12902 Ocean Gateway Highway.

U.S. District Judge Andre M. Davis indicated that the sentencing hearing will be held in September, but no specific date has been set.

According to their plea agreements announced by U.S. Attorney for the District of Maryland Rod J. Rosenstein, Zhu & Partners purchased the Miyako property for $2,300,000 in September 2004.

In February 2005, a bank employee observed Siu Ping Cheng depositing large amounts of cash into Panda Buffet’s accounts. Over several months, ICE agents also observed several individuals, believed to be illegal immigrants, traveling in Bo Hao Zhu’s vehicle from Panda Buffet, where they worked, to Zhu and Cheng’s condominium.

A review of immigration records in June 2006 revealed that six of 11 occupants of the condominium who were employees of Panda Buffet were in the country illegally.

In June 2007, agents established that four of eight employees working at both restaurants were in the country illegally, according to the U.S. attorney.

Zhu and Cheng had knowingly hired these illegal aliens and paid them in cash for less wages than the law required. From 2005 to 2007, Zhu & Partners, LLC concealed numerous illegal aliens from detection in residences and businesses it owned and rented.

During 2007, Zhu paid wages to employees of his restaurants, resulting in employment taxes owed to the government of $6,798.10. Zhu failed to pay the employment tax and provided false information to the IRS concerning wages paid to employees, according to the U.S. attorney.