DOJ: Thai Restaurant Owners Plead Guilty to Fraud Conspiracy

Owners of Popular Thai Restaurant Group Plead Guilty in Scheme to use 'Tax Zapper' Software to Hide Cash Income and Reduce State & Federal Taxes

Defendants Conspired to Defraud Government Tax Systems by Hiding Cash Sales, Funneling Proceeds to Overseas Accounts, and Failing to Pay Some Employment Taxes on Workers

Thursday, August 15, 2019

Two owners of the popular 'Bai Tong' restaurant chain pleaded guilty Wednesday, August 14 in U.S. District Court in Seattle to a multi-year scheme to hide cash sales and reduce the taxes owed at the restaurant chain, announced U.S. Attorney Brian T. Moran. PORNCHAI CHAISEEHA, 41, and CHADILLADA LAPANGKURA, 40, both of Kent, Washington, pleaded guilty Wednesday to conspiracy to defraud the government by hiding more than $1 million in income. The two are scheduled for sentencing by U.S. District Judge James L. Robart on November 4, 2019.

According to records filed in the case, CHAISEEHA and LAPANGKURA were part owners of the chain that has Thai restaurants in Washington, Oregon, and Hawaii. Some of the restaurants operated under the name 'Bai Tong,' and some were called 'Noi.' The restaurants used a point-of-sale computer system that included a “cash suppression” or “Zapper” software program that modifies the sales records by removing cash sales from the business records. The two had the “Zapper” software operating at their Redmond and Tukwila, Washington, restaurants and at their Bend, Oregon, restaurant. The restaurants earned $1,034,750 in cash income that was never reported on state or federal tax returns, resulting in an agreed tax loss of $299,806. The pair also used the unreported cash to pay employees under the table, avoiding state and federal employment

taxes. Finally, some of the cash proceeds were siphoned off to bank accounts in Thailand, and the existence of the accounts was not reported on their income tax returns.

The defendants have agreed to pay $299,806 in state and federal taxes as part of the criminal case. The IRS may also assess other taxes, penalties, and interest through its civil processes.

Prosecutors have agreed to recommend sentences of no more than two years in prison for LAPANGKURA and no more than 18 months in prison for CHAISEEHA. The Court is not bound by the recommendation. The sentence will be determined by the Court based on the advisory Sentencing Guidelines and other statutory factors.

The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and Homeland Security Investigations (HSI). The case is being prosecuted by Assistant United States Attorney Matthew Diggs.