New Haven Woman Used Tax Suppression Software: DRS

MILFORD, CT — The state Department of Revenue Service made its first arrest for the use of tax suppression software. The software allowed Lao Sze Chaun restaurant in Milford to collect, but not remit taxes to the state, according to DRS officials.

The software, known as a "zapper" creates fraudulent point of sale records to underscore the amount of taxes that are collected. Xiaoning Fan, 64, of New Haven was arrested and charged with first-degree larceny, willful delivery of a false return and possession of tax suppression software.

" We have been working with other states to develop our ability to detect and prosecute “zapper” fraud," said DRS Commissioner Kevin Sullivan. "What began as a routine tax audit became a DRS arrest when our specially trained auditors successfully detected illegal use of sales suppression software from 2008 to 2016 that resulted in over $80,000 of state tax evasion plus an additional $60,000 in penalty and interest charges."

Image via DRS