Restaurant Owner From West Hartford Gets Prison Time For Tax Fraud

WEST HARTFORD/BRIDGEPORT, CT — A West Hartford resident and restaurateur will spend a year and a half behind bars for tax fraud that cost the government more than $2 million after sentencing in federal court Wednesday.

Vanessa Roberts Avery, U.S. attorney for Connecticut, said William Chen, 49, of West Hartford, was sentenced by U.S. District Judge Stefan R. Underhill in Bridgeport to 18 months of imprisonment, followed by one year of supervised release, for operating an extensive tax fraud scheme involving Connecticut and Massachusetts restaurants that he owned and operated.

Underhill also ordered Chen to pay a $20,000 fine.

According to court documents and statements made in court, Chen was a part owner of several restaurants, including: Ginza Japanese Restaurant in Bloomfield; Ginza Japanese Cuisine in Wethersfield; Kaliubon Ramen in Wethersfield and West Hartford; and Feng Asian Bistro in Hartford, Canton, and Millbury, Mass.

Avery said Chen was responsible for purchasing and using the Point-of-Sale (POS) system for restaurant orders and for training staff on the use of the POS system.

In connection with the POS system, Chen paid an additional fee to activate “zapper” software, which is a commercial computer program designed to deliberately delete transactions from the POS system to create fraudulent sales records, she said.

From approximately 2013 to 2020, Chen and others who worked at the restaurants deleted cash transactions with the intent to reduce the gross receipts and the amount of sales tax collected reported by the POS, Avery said.

As a result, Chen intentionally suppressed the restaurants’ taxable income he disclosed to his accountant who prepared his and his restaurants’ income tax returns, according to authorities.

Chen was responsible for the accounting and financial records at the restaurants, for the collection and withholding of employment taxes for the restaurants at which he worked, and for signing the restaurants’ tax returns, Avery said.

For the 2013 through 2020 tax years, Chen failed to withhold, account for, and pay to the IRS federal income taxes, Federal Insurance Contributions Act taxes (“FICA”) and federal unemployment taxes for multiple employees he paid, or that he knew were paid, in cash, she said.

The tax loss attributable to Chen’s criminal conduct is $2,092,927, Avery said. To date, Chen has paid $600,000 in restitution, according to authorities.

On July 29, 2022, Chen pleaded guilty to two counts of filing a false tax return.

Chen is required to report to prison April 5.

This matter was investigated by the Internal Revenue Service – Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney David T. Huang.

From July 29: 'West Hartford Restaurateur Pleads Guilty To Tax Fraud: Feds'