2013
The Vancouver Sun reported back in 2013 that the British Columbia Court of Appeal has tarnished a successful, high-profile Canada Revenue Agency investigation into restaurant tax cheats. Four years after a Richmond computer company was charged and a year after it was convicted of tax fraud, the province’s highest bench has ordered the company acquitted.
When a zapper is installed in conjunction with the firm’s Profitek point-of-sale record keeping system, a user can delete cash transactions from sales records and produce statements that under-report income.
The RCMP conducted an undercover operation in 2008 in which agents set up shop in a Vancouver restaurant and purchased the zapper software from InfoSpec.
The owners of four B.C. restaurants were charged with tax evasion and the CRA said more than $3 million in sales had been hidden and nearly $1 million in tax lost.
The owner of a North Vancouver sushi restaurant was handed 20 months house arrest and fined almost $143,000 after pleading guilty to tax evasion using the software.
A former InfoSpec salesman was sentenced to two years and six months in jail for fraud over $5,000 in relation to the sale of the software.
2016…
The Seattle Times reported Yu-Ling Wong, majority owner of Facing East, a Taiwanese restaurant in Bellevue, was charged in King County Superior Court with theft, unlawful use of sales-suppression software and filing false tax returns.
Wong told investigators that at the end of each month she would insert a USB drive into the computer that tallied sales, the complaint said. Software housed on the drive would erase sales until the cash transactions reached a specified level. It would then tell her how much cash to remove from the register to make the falsified books line up.
Wong, the complaint says, gave up the USB drive and told state investigators that she would pay the proper amount of taxes in the future. She also told investigators the cash removed from the register was used to pay kitchen staff under the table because they preferred to be paid that way, the complaint said. She told state investigators that she was worried she would be “in trouble in the community for sharing how the software worked because so many restaurants use it,” the complaint said.
In July, the Attorney General’s Office and the Internal Revenue Service searched the residence of the Washington state sales representative for Profitek, the company that made the point-of-sale software used at Facing East. The representative subsequently admitted he trained Wong in using sales-suppression software.
A voice mail left for Pius Chan, Profitek’s president, was not returned. Profitek is based in Richmond, B.C., near Vancouver.
After investigating the firm, Canadian authorities charged Profitek with tax evasion and fraud. The tax-evasion charges were dismissed, and a fraud conviction was overturned on appeal in 2013, the complaint said. Separate cases against Profitek salespeople and restaurants that use the software resulted in some guilty pleas and convictions, according to the complaint.
More on zappers in Washington State here.
