California Attorney General Xavier Becerra Announces Sentencing of Jeong Kim for Tax Evasion, Workers' Compensation Fraud

Strategic Insights -

California Attorney General Xavier Becerra announced that Jeong Kim, the owner and operator of Fashion Q and Q retail clothing stores throughout Southern California, was sentenced to two years in prison for sales tax evasion, false income tax returns, failure to pay taxes, and workers' compensation fraud. Attorney General Becerra filed a felony complaint against Kim in the Los Angeles Superior Court on June 19, 2017. The investigation, led by the California Department of Justice, found that Kim failed to report over $29 million in taxable sales, $39 million in taxable income, and $8 million in wages to various government agencies.

Key Takeaways:

  • Jeong Kim, the owner and operator of Fashion Q and Q retail clothing stores, was sentenced to two years in prison for sales tax evasion, false income tax returns, failure to pay taxes, and workers' compensation fraud.
  • Kim failed to report over $29 million in taxable sales, $39 million in taxable income, and $8 million in wages to various government agencies from 2010 through 2016.
  • The Department of Justice, Department of Tax and Fee Administration, Franchise Tax Board, and Employment Development Department pursued the case in partnership as part of the Tax Recovery and Criminal Enforcement (TRaCE) Task Force.
  • Kim entered a guilty plea to four counts on July 18, 2017, and has paid $7,636,725 in restitution, including tax, interest, insurance premiums, and the cost of investigation.
  • The California Department of Justice will continue to hold criminals accountable and protect the pockets of Californians who pay their fair share.

Statistics:

  • $29 million: the amount of taxable sales Kim failed to report to the Department of Tax and Fee Administration.
  • $39 million: the amount of taxable income Kim failed to report to the Franchise Tax Board.
  • $8 million: the amount of wages Kim failed to report to the Employment Development Department.
  • $5.6 million: the amount of sales, income, and payroll tax Kim evaded.
  • $7,636,725: the amount of restitution Kim paid, including tax, interest, insurance premiums, and the cost of investigation.

Sources:

  • "California Attorney General Xavier Becerra Announces Sentencing of Jeong Kim for Tax Evasion, Workers' Compensation Fraud" ( State of California, January 17, 2018)
  • "California Department of Justice Press Release" (State of California, June 19, 2017)
  • "Los Angeles County Superior Court Records" (Los Angeles County Superior Court)