Fraud Buffet

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Man using calculator and calculate bills in home office.

If you try to look up the online menu for the New China Buffet & Grill (NCBG) in Clarksville, Tenn., you’ll find that the restaurant is permanently closed. However, its “out of business” status is not due to the COVID-19 pandemic, but because of the owner’s decision to harbor illegal immigrants. As a result of this unfortunate decision, Quanwei Shi, 31, pleaded guilty to harboring illegal aliens, money laundering, tax evasion, and employment tax fraud. (If fraud were served on a buffet, this fraudster loaded up his plate without much thought about the incredible indigestion he would suffer later.)

Between 2017 and April 2019, Shi allowed undocumented workers from China and Guatemala to live with him at his home in Clarksville. He transported them to and from NCBG, where they worked in the kitchen, each day. (He purposely kept them behind the scenes so they would not interact with the restaurant patrons.)

Shi not only hid the undocumented workers from the establishment’s guests, but also from the government. The owner did not make these workers complete any immigration status forms and paid them in cash so they would not be tracked by the restaurant’s payroll system.

Shi also underreported his gross receipts on NCBG’s corporate tax returns. (That’s so he would not have to pay taxes on the income.) He also failed to collect, account for, and pay employment taxes for a tax loss of $440,941. (He tried to cook the books, but he was the one that got burned in the end.)

When sentenced for trying to defeat the tax laws of the U.S., Shi faces up to 45 years in prison. He will most likely have to forfeit his Clarksville home, two vehicles, and $76,073.25 in cash from two bank accounts.

Perhaps the judge will hand out an appropriate fortune cookie when Shi’s sentence is delivered. (My guess is that it will read something like, “It takes less time to do the right thing than it does to explain why you did it wrong.”)

Today’s Fraud of the Day comes from a Department of Justice press release, “Clarksville Restaurant Owner Pleads Guilty In Alien Harboring and Tax Fraud Conspiracy,” dated March 3, 2021.

NASHVILLE, Tenn. – March 3, 2021 – The majority owner of the New China Buffett & Grill (NCBG) in Clarksville, Tennessee, pleaded guilty yesterday in U.S. District Court to conspiracy to harbor illegal aliens; harboring illegal aliens; money laundering; tax evasion; and employment tax fraud, announced Acting U.S. Attorney Mary Jane Stewart for the Middle District of Tennessee.

Quanwei Shi, 31, of Clarksville, pleaded guilty before U.S. District Judge Eli J. Richardson.  Shi and NCBG co-owner Chongqiang Chen, 30, also of Clarksville, were arrested in April 2020, after a 14-count indictment charged them in a scheme to harbor undocumented workers and to defeat the tax laws of the United States.

 

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.