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Restaurant Owner Sentenced to 30 Months’ Imprisonment for Tax Violations that Cost the Government Almost $1.2 Million

by U.S. Attorney's Office, Eastern District of Pennsylvania

Mar 28, 2024

Guo pleaded guilty in 2023 to conspiracy to defraud the United States, a charge that arose from his use of a cash payroll at his family-owned-and-operated restaurant to avoid paying the full amount of employment taxes due. Records seized from the restaurant pursuant to a search warrant showed that employees were paid wages by a combination of paycheck and cash. Records provided by Guo’s accountant showed that only the portion of the payroll that was paid by check was disclosed to Guo’s accountant. The IRS calculated that Guo’s restaurant failed to report on its Form 941 more than $3.9 million of cash wages that he paid employees from the first quarter of 2013 through the first quarter of 2020, resulting in a payroll tax loss of approximately $444,899.

Guo also pleaded guilty to attempted tax evasion, a charge that arose from his failure to report cash skimmed from the restaurant on his Form 1040 returns for tax years 2016, 2017, and 2018. The IRS calculated that Guo failed to report more than $2 million of income on his Form 1040 for 2013 through 2018, resulting in a tax loss of approximately $727,469.

“Guo’s crimes cost the government more than a million dollars in tax revenue,” said U.S. Attorney Romero. “They’re also a slap in the face to every honest taxpayer who does the right thing each year. As this case shows, we’re fully committed to prosecuting tax cheats who refuse to contribute their fair share. Bottom line: pay what you owe or prepare to pay some serious consequences.”

“Our largest enforcement program is directed at the portion of American taxpayers who willfully and intentionally violate their known legal duty of filing and paying their taxes,” said IRS Criminal Investigation Special Agent in Charge Yury Kruty. “Anyone contemplating cheating on their taxes should know that IRS Criminal Investigation Special Agents work tirelessly, year-round, to investigate tax and financial crimes.”

The case was investigated by the Internal Revenue Service Criminal Investigation and prosecuted by Assistant United States Attorney Karen L. Grigsby.

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