SAN JOSE – Liping Liu was sentenced today to 30 months imprisonment, a $25,000 fine, and ordered to pay $744,248 in restitution for tax evasion, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez announced.
According to the plea agreement, Liu was the receptionist and office manager for her spouse’s pediatric dental and orthodontic practice. Liu created a tax evasion scheme in which she skimmed money from various sources, including rental properties and her spouse’s dental and orthodontic practice. Liu admitted that she knew her actions were against the law and she was evading the assessment and payment of federal taxes throughout the course of her scheme.
Liu evaded taxes by funneling money from her husband’s practice into various bank accounts to prevent those funds from appearing in the business bank accounts. The only funds deposited into the business bank accounts were insurance payments, aside from thirteen personal checks in 2006 and one personal check in 2009. Liu admitted that she deposited the insurance proceeds exclusively into the business accounts because she knew the insurance company reported these payments to the IRS. Liu further admitted that she offered a 10% discount to dental clients if they paid in cash or by check, as long as they left the payee section on the check blank. Liu also modified checks, in the memo and payee fields to disguise the source of the payment. This enabled her to deposit the checks into the non-business accounts and evade taxes.
In addition, according to her plea agreement, from 2006 through 2010, Liu was a 50% partner in a limited liability corporation, HSL, which was created to hold rental property. Liu diverted rental checks paid to HSL to non-business bank accounts for the purpose of evading taxes on the HSL entity. She also changed the payee information on numerous rental checks.
From 2006 through 2010, Liu omitted $2,147,741.04 in gross receipts. This resulted in additional tax due and owing of $744,248.
Liu also admitted to providing incomplete and false information to the family bookkeeper, and engaging in a series of structured cash transactions from September 2008 to September 2009, which allowed her to continue to hide taxes from the IRS.
Liu, 56, of Saratoga was charged on March 19, 2014, with one count of tax evasion. She pleaded guilty to the charge on March 24, 2014.
The sentence was handed down by the Honorable Ronald M. Whyte, United States District Court Judge, in San Jose. Judge Whyte also sentenced Liu to a three-year term of supervised release. The defendant was ordered to surrender on December 1, 2014.
Assistant United States Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
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Content retrieved from https://www.justice.gov/usao-ndca/pr/saratoga-resident-sentenced-two-and-half-years-prison-failing-report-over-21-million