By Ruth Bayang
Northwest Asian Weekly
John Yin of Everett pleaded guilty to wire fraud for selling revenue-suppression software that allowed businesses to cheat on their taxes. The scam cost the U.S. government more than $3.4 million.
The U.S. Department of Justice said in a Dec. 2 news release that Yin sold software built by Profitek, a Vancouver, Canada company that sells point-of-sale software for recording transactions by restaurants and other businesses. He also sold, according to the U.S. Attorney’s Office, a tool called “Tax Zapper” that Profitek either built or commissioned from a Chinese affiliate to help customers hide cash transactions to reduce tax payments.
Prosecutors say eight restaurants in the Seattle area were found to be using this software and have underpaid their taxes by between $145,000 and $910,000, between 2010 and 2013.
Yu-Ling Wong, owner of Bellevue’s Facing East restaurant, is charged with dodging $395,000 in sales tax and is facing two years in prison if found guilty. Wong admitted to the use of the software at the end of each month to delete cash transactions in a computer, and gave up a USB drive that contains the software to authorities. Wong also told the attorney general’s office that the money removed from the sales books was used to pay kitchen staff under the table.
U.S. Attorney Annette Hayes said, “They cheated state and federal programs and victimized workers, whose employment and social security taxes went unpaid as well.”
In 2013, Washington state passed a law that made “automated sales suppression devices, phantom-ware, electronic cash registers or point of sale systems used with automated sales suppression devices or phantom-ware, and any property constituting proceeds traceable” illegal (RCW 82.32.290).
Yin, 66, will pay restitution of $3,445,589. Sentencing will be in February 2017. He faces up to 25 years behind bars.
Ruth can be reached at firstname.lastname@example.org.