Cranbury Man Sentenced In Tax Evasion Conspiracy: Authorities

A Cranbury Township man has been sentenced to three years and one month in prison for not reporting over $1.5 million in income he fraudulently diverted to overseas shell companies, U.S. Attorney Paul J. Fishman announced on Tuesday.

Michael Q. Fu, 53, previously pleaded guilty to an information charging him with one count of conspiring to evade income taxes and one substantive count of tax evasion.

He is also subject to three years supervised release and must pay $870,000 restitution.

Albert W. Chang, 69, of Princeton Junction, was a co-defendant in the case. He pleaded guilty in September and awaits sentencing.

In 1991, Fu and Chang established a business named United Products and Instruments Inc. (UNICO) that they co-owned and operated in Dayton, NJ, according to documents filed in the case and statements made in court.

The business primarily engaged in the sale and export of microscopes and centrifuges for medical purposes.
They admitted that they created two shell companies headquartered in China – Action Towers and Bench Top Laboratories.

They used those shell companies to funnel money to themselves by placing it in the shell companies’ bank accounts. They then deducted the diverted funds from UNICO’s corporate tax return as the cost of goods sold or commission.

They also had Hong Kong based Shanghai Electric overbill UNICO by about 5 percent on legitimate invoices.

After UNICO paid those invoices, they directed Shanghai Electric to wire transfer the overbilled amount to their accounts in China, which they used for their personal benefit.

They didn’t report any of that income on their federal income tax returns.

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