Sam Woo Restaurant Owner Guilty in Multimillion-Dollar Tax Fraud Scheme

Sam Woo owner Gary Cheung pleaded guilty to felony charges involving tax evasion and insurance fraud this month, all related to his Los Angeles County chain of Cantonese barbecue restaurants. Cheung was brought up on 107 total charges and pleaded guilty to multiple felonies including filing a false sales tax return, failure to pay payroll taxes, and filing a false income tax return.

Cheung will serve no less than three years in prison — and that’s if he pays $2,964,375.93 in restitution — or nine years and four months in prison if he fails to pay the full amount. Cheung will be formally sentenced in August 2021.

According to a press release from Attorney General Xavier Becerra’s office, Cheung ran a fraudulent tax and workers’ compensation insurance scheme through his restaurants from January 2012 to March 2019 where he failed to report (or underreported):

• Over $16 million in sales to the Department of Tax and Fee Administration
• Over $14 million in taxable income to the Franchise Tax Board
• Over $2.1 million in wages to the Employment Development Department
• Over $2.1 million in wages to insurance carriers

Cheung also evaded payment of $2,414,769.93 in sales tax, income tax, and payroll tax, and $549,606 in workers’ compensation insurance premiums. The investigation into Cheung’s scheme was completed by members of the Tax Recovery in the Underground Economy task force.

The original Sam Woo Restaurant, which opened in LA’s Chinatown over 40 years ago, has since expanded across the county with additional locations in Rosemead, Cerritos, and Van Nuys. The chain is best known for its Hong Kong-style barbecued ducks and pigs, and for its dependably fast service.

• Attorney General Becerra Secures Nearly $3 Million in Restitution for Seven Year Long Tax and Insurance Fraud Scheme [State of CA Department of Justice]