A Fremont business owner was sentenced to 10 months in prison last week after he pleaded guilty to running a scheme to underreport his income by almost $4.5 million, according to the U.S. Department of Justice.
Milpitas resident Cuong Chi Quan, also known as Roger Quan, was charged last year with one count of willfully aiding and assisting in the preparation of a false tax return and one count of willfully violating foreign bank account reporting requirements. Quan pleaded guilty to both counts in April 2023, according to a news release from federal prosecutors.
Quan owned and managed a company, called QXQ, Inc., that manufactured circuit board test fixtures. He separated his bookkeeping files into two sets, according to the U.S. Department of Justice. One set of books recorded sales to customers in the U.S. and all of the company’s expenses. The second set of books recorded sales to customers in Asia. He only provided his income tax preparer with the bookkeeping files that recorded the company’s sales in the U.S. and all of its expenses.
Quan also told his customers in Asia to wire their payments to company bank accounts in New Zealand, according to Quan’s plea deal. He did not provide his income tax preparer with his sales to customers in Asia or the statements from his personal and company’s foreign bank accounts.
In 2017, he omitted more than $4 million from his income statement, allowing him to avoid paying almost $1.8 million in income taxes. Quan also had at least 11 foreign bank accounts and did not report their existence or the interest earned to his tax return preparer.
The court imposed a restitution to the Internal Revenue Service of almost $8.2 million for Quan’s underreported federal income tax from 2014 to 2018. Quan must also pay a fine of $35,000 and will receive a 3-year term of supervised release.
Source: www.mercurynews.com