Local restaurant chain owners charged with tax fraud

VIDEO: Local restaurant chain owners charged with tax fraud

A complaint has been filed in US District Court for the Western District of Washington against the owners of a popular Thai restaurant chain for “Conspiracy to Defraud the United States.”

According to the federal documents, Chadillada Lapangkura and her husband, Pornchai Chaiseeha, used Revenue Suppression Software – commonly called “zapper” software – “to omit some cash sales from certain Bai Tong Restaurants’ accounting records, and create an inaccurate free-standing set of records that omitted those cash sales.”

The zapper software was allegedly used at Bai Tong of Redmond, Bai Tong of Tukwila and Noi Thai Cuisine of Bend, Oregon, to “under-report revenue by $1,034,750. The additional state and federal tax due on the unreported income for tax years 2011 through 2016 was $299,806.”

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Money collected by sales tax supports schools, law enforcement, public health and more according to Kim Schmanke of the Washington State Department of Revenue.  “It’s collected in trust by a business for the state’s purpose,” Schmanke said in 2016, when KIRO 7 broke news of the first criminal zapper case filed in Washington.

Schmanke said at the time that anyone convicted of using zapper software to hide sales revenue is “outright stealing from you and from me and from the public.”

In its 2016 report, KIRO 7 revealed that Yu-Ling Wong – the owner of Facing East Taiwanese restaurant in Bellevue – admitted to Department of Revenue investigators that she used zapper software "for many years" which "helped the restaurant under-report" more than $400,000 in taxes.

Wong pleaded guilty in 2017 and was ordered to pay $300,000 in restitution and another $600,000 in penalties.

At the time, Washington State Attorney General Bob Ferguson called zapper software “sinister” because “it enables them to avoid paying sales taxes on those sales that essentially disappear from the transaction sheet and makes it hard to track.”

Federal documents allege that some of the cash omitted from Lapangkura and Chaiseeha’s income records was “transferred to bank accounts in Thailand.”

KIRO 7 requested interviews with the couple and their attorney, but instead received the following statement:

Statement from Bai Tong Thai Restaurant:

"We sincerely apologize that we cannot disclose any information regarding the case. It is in the legal process and we do not want any statements that we make to affect it. What we can tell you is that this incident had happened a long time ago. Our restaurant has been compliant even before the Federal Agency came to audit us in August 2017. Again, I’m really sorry that I cannot give out anymore information, and I really appreciate your understanding."

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