After IRS officials said he willfully underreported his total income by roughly $9.4 million over five years, a Peoria business owner is set to be sentenced in September on federal tax evasion charges.
According to an IRS press release, the guy, Sung Hwan Lee, the owner of BBB Fashion, underreported his total income by $9,355,894 between 2012 and 2016.
Hwan Lee owes $3,696,786 on his personal returns for the years 2012 to 2016.
According to the news release, Hwan Lee owns and operates BBB Fashion, a clothing business network in and around Phoenix and Tucson.
Hwan Lee accepted a plea offer for his part in the tax evasion plan on March 23, according to court documents. According to court documents, he pleaded guilty to tax evasion, which is punishable by a “maximum punishment of $100,000, a maximum sentence of imprisonment of five years or both, and a term of supervised release of up to three years.” Probation is limited to five years in length.
According to court documents, Hwan Lee’s plea agreement also requires him to pay $3,696,786 in restitution to the IRS.
In U.S. District Court in Arizona, the business owner is due to be sentenced on September 21.
“This is a significant sum – $9 million,” said IRS special agent and spokesman Brian Watson. “Wow, that’s a substantial sum of money.” We’ve had a lot of smaller cases.”
According to IRS officials, the owner told his staff to “deliver him any cash collected from customers and keep the second set of books and records to track true versus reported income and spending,” according to IRS officials. His accountant’s books and records for preparing tax returns removed cash received at his request.”
Young Bok Lee, a BBB Fashion employee, accepted a plea deal on May 19 and admitted to conspiring to deceive the IRS. Bok Lee is accused of assisting the business owner in “setting aside cash obtained from consumers” and of either transferring the money to Sung Hwan Lee directly or “putting it in a safe for him to recover at a later time.”
During his time at the company, Bok Lee was responsible for bookkeeping, payroll, and management. On July 28, he will receive his sentence.
According to court filings, a conspiracy charge carries a maximum punishment of $250,000, a possible sentence of five years in prison or both, and three years of supervised release.
According to court documents, Bok Lee admitted to underreporting his income by $272,479 in April and was sentenced to pay $46,194 in restitution fees.
According to the website, BBB Fashion has five locations: three in Phoenix, one in Avondale, and one in Tucson. BBB Fashion was formed in 1998, according to its website, and it provides “unique shopping experiences as a one-stop whole fashion centre.”
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Customers can expect the “greatest assortment of today’s styles” from the chain, which promises to go above and beyond their expectations.