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Minnesota restaurant 'ghost owners' hit with 26 felony tax fraud charges - Bring Me The News
From 2014 to 2019, the restaurants in Minneapolis and Fridley underreported more than $10 million in sales, with roughly $810,000 being sales tax, not including substantial interest and penalties.
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Sufeng Zheng, 46, and Ting Gui Zheng, 51, face 26 felony-level tax fraud charges.
Two people from Hennepin County are facing jail time after they were officially charged with 26 felony counts for falsifying tax returns from the restaurants they "ghost" owned.
Court documents state that 46-year-old Sufeng Zheng, of Plymouth, and 51-year-old Ting Gui Zheng, of Maple Grove, used a computer software program to suppress sales transactions to underreport sales tax at Teppanyaki Grill & Supreme Buffet from 2016 to 2018.
According to the criminal complaint, the restaurant has two locations — one in Minneapolis and another in Fridley. An investigator was advised of possible tax fraud being committed at the establishments by "ghost owners," who were identified as the Zhengs.
An investigation revealed that the couple had been acting as four other different businesses. From 2014 to 2019, the restaurants in Minneapolis and Fridley underreported more than $10 million in sales, with roughly $810,000 being sales tax, not including substantial interest and penalties.
Court documents also state that another person, Ming Zhu, from Blaine, helped the Zhengs in the process. Zhu is charged with eight felony-level counts consisting of aiding or assisting in the filing of false or fraudulent sales tax returns and theft by swindle.
Restaurants are required to report sales tax returns to the Minnesota Department of Revenue monthly, quarterly or annually, depending on the amount. However, as the complaint states, neither the Zhengs nor Zhu did so.
Police found "multiple sets" of sales records for the two restaurants after search warrants were conducted at the couples' homes. Double reports and "pre-zapped" reports were found primarily at the Zhengs', but some were found at Zhu's home as well. In addition, an agreement was found that stated that the underreporting of cash sales would be calculated by "75% to 80%."
The Zhengs, along with Zhu, will make their first court appearances on June 28.