A Korean American owner of three auto maintenance and repair businesses in Orange County has been caught evading taxes by underreporting nearly 80% of his actual income. He concealed his income by cashing customer repair bills at a check-cashing company.
The U.S. Attorney’s Office for the Central District of California announced on November 27 that Chung Ku Sin, 68, of Garden Grove, pleaded guilty to a single-count information charging him with filing a false tax return.
According to federal prosecutors, Sin’s tax evasion spanned seven years. During this time, he omitted nearly $3 million in income, resulting in a tax loss of nearly $1 million.
Per his plea agreement, Sin owns and operates three auto-repair companies in Orange County: Golden Auto Body, Tops Auto Body, and Victory Auto Body. From 2015 through 2021, Sin received payments for services from these companies, including in the form of checks. He used a check-cashing business in Garden Grove to cash checks for services performed by these companies during this period.
The checks he cashed totaled $2,972,765, and the taxes he evaded amounted to $977,807.
Federal prosecutors noted that Sin willfully and intentionally withheld from his tax preparer the business receipts and income these companies received in the form of checks. He only provided his tax preparer with, and reported on his tax returns, the business receipts and income that he had deposited into his business bank accounts.
“Sin knew that this tax return falsely reported that his total income for 2016 was $180,124 when, in fact, he knew the number he provided to the government omitted approximately $580,351 in income,” federal prosecutors said.
The investigation, conducted by the IRS Criminal Investigation Division, revealed that Sin admitted to omitting and underreporting income on his individual income tax returns for seven years, from 2015, 2017, and 2019-21. “The tax loss to the federal treasury that Sin knowingly caused over a seven-year period is nearly $1 million,” federal prosecutors said. “Sin has agreed to pay this amount to the IRS, plus penalties and interest.”
United States District Judge John W. Holcomb has scheduled a sentencing hearing for May 10, 2024. Sin faces a statutory maximum sentence of three years in federal prison.
BY NICOLE CHANG, JUNHAN PARK [firstname.lastname@example.org]