The owner of St. Michael’s lone Chinese restaurant has pleaded guilty in a tax fraud case dating back more than five years.
Dexi Zheng, owner of China Inn Buffet in St. Michael and in Big Lake, pleaded guilty to filing more than $420,000 in false federal income tax returns from 2009 to 2013, failing to report more than $1.2 million in sales.
Zheng was charged, according to Twin Cities Business Magazine, in July 2015 with a single count of filing a false individual return. He is awaiting sentencing, which has not been scheduled. He also faces up to three years in prison for the crimes.
Tax payments were avoided through a couple of methods, according to court filings in the U.S. District Court here in Minnesota. Zheng failed to deposit cash receipts from 2009 to 2013, something he should have done on a federally monitored tax report each year. Secondly, Zheng included profits from both restaurants on his father’s tax return, despite his father having nothing to do with either business.
TC Business provided this breakdown:
Year Amount of unreported sales Tax Loss
2009 $243,204 $82,0042010 $286,198 $96,462
2011 $291,446 $92,853
2012 $237,534 $76,121
2013 $214,773 $73,006
Total $1,273,155 $420,446
The Internal Revenue Service’s criminal investigation division led the case. In a statement, special agent Shea Jones said, “Individuals who corruptly violate tax law to further their business interest and intentionally falsify their tax returns undermine confidence in our tax system. [Such acts] unfairly disadvantage businesses that play by the rules.”