St. Louis Park Restaurant Faces Tax Fraud Charges

ST. LOUIS PARK, MN — A St. Louis Park restaurant and its two owners are accused of conducting an elaborate scheme to underreport sales and base their sales tax returns on fake sales numbers, Hennepin County Attorney Mike Freeman announced Thursday.

Su Qian, 43, and Xu Sheng Wang, 45 — both of Plymouth — are charged with 16 counts and 14 counts of tax fraud, respectively. They are currently out of custody.

The restaurant itself, Raku Sushi & Lounge, was charged with 14 counts of failure to pay or collect sales taxes.

"We intend to prove that this was a highly sophisticated scheme that ran for many years which cost the state more than ... $200,000 in tax revenue," Freeman said in a news release.

"The revenue department’s investigators did an excellent job of conducting a long, difficult investigation, and these crimes occurred prior to the pandemic during robust economic times."

Investigators began looking into the St. Louis Park restaurant in March 2018 after a Minnesota Department of Revenue audit uncovered potential "criminal sale suppression activity," according to the criminal complaint.

Authorities also investigated the Raku restaurant in Edina, which is also owned by Qian and Wang, police said. That restaurant is not facing charges.

Executed search warrants uncovered two USB drives in Qian’s purse that contained a program called "Happy World.exe," which can be used to delete and alter sales records, police said.

Company records reviewed by investigators showed underreporting amounts from between $658 to $25,500, according to authorities.

In a 15-month span, the two restaurants underpaid sales taxes by nearly $240,000, the criminal complaint states.

Restaurant employees said the point-of-sale machines were primarily handled by Qian and Wang, according to authorities. Qian was responsible for the monthly reports, police said.