Restaurant Owners Admit To Hiring Illegal Aliens
WEST OCEAN CITY - The owners of two West Ocean City restaurants raided by U.S. immigration officials in October pleaded guilty this week to hiring and harboring illegal aliens and evading employment taxes that should have been paid on the illegal employees and now face significant amounts of jail time, fines and the forfeiture of their property in the resort area.
Bo Hao Zhu, 33, and his wife Siu Ping Cheng, 30, both of Ocean City, pleaded guilty to U.S. District Court on Tuesday hiring and harboring illegal aliens at their two restaurants in West Ocean City, the Mikayo Sushi and Seafood Buffet in the old Ocean City Marlin Club building on Route 50 and the Panda China Buffet in the White Marlin Mall, over a two-year period from 2005 to 2007. The couple, and their corporation, Zhu and Partners LLC, also pleaded guilty to federal employment tax evasion in an amount just under $7,000 for failing to report income paid in cash to the illegal aliens in their employ.
As majority owners of the corporation, Zhu and Cheng face a maximum of 10 years in prison and a fine of $250,000, or double the pecuniary gain from their actions, whichever is greater, for knowingly harboring, concealing and shielding from detection the illegal aliens they employed and housed at a residence in the nearby Oyster Harbor community. The corporation also agreed to forfeit all money, property or assets of any kind derived from their illegal activity including the Mikayo Sushi and Seafood Buffet building on Route 50.
Individually, each of the defendants pleaded guilty in separate agreements to different counts related to the larger agreement for the corporation. For example, Cheng pleaded guilty to knowingly hiring and harboring illegal aliens and engaging in a pattern of hiring illegal aliens. She faces a fine of $3,000 and/or six months in jail for each of the dozen illegal aliens she was known to hire and employ during the period in question.
For Zhu's part, his individual guilty plea includes an admission of evading taxes. In the plea arrangement, Zhu acknowledges he owed substantially more federal employment tax for the first two quarters of the calendar year than he declared on his federal tax return and willfully took action with the intent of evading and defeating the payment of taxes owed to the government.
For his individual plea, Zhu faces a maximum of five years in jail and a fine of $250,000, or twice the pecuniary gain from his actions. All parties agree the amount of federal employment tax evades is $6,798, which would come in as base offense level of six on a sliding scale established by the government for such cases.
The parties agree an upward departure from the base offense level is appropriate because of the illegal alien aspects of the case, which drives the base offense level to 12. However, federal prosecutors agreed to reduce it back down to 10 because of the defendant's cooperation in the case after being charged. Zhu and Cheng will be sentenced in September.
The agreed-upon statement of facts in the case reveal a long pattern of hiring and employing illegal aliens at the two West Ocean City restaurants and housing them in various locations owned or rented by the couple in and around the resort area. Things started to unravel for Zhu and Cheng in February 2005 when a Bank of Ocean City employee observed Cheng depositing a large amount of cash into the Panda Buffet's payroll account.
That same month, federal Immigration Customs Enforcement (ICE) agents observed several individuals known to be illegal immigrants going to and from Panda Buffet in a vehicle registered to Zhu. In June 2006, a Maryland State Police trooper observed 11 occupants inside Zhu and Cheng's condominium and, after obtaining consent to enter, asked each individual for his identification. A review of their immigration records revealed six of the 11 occupants were in the country illegally and working at Panda Buffet.
In June 2007, law enforcement officials interviewed the employees of Mikayo and Panda in an effort to sort out who was working where and who, if any, were in the country illegally. Of the eight employees working in the restaurants at the time, four, or half, were illegal aliens. It was established Zhu and Cheng had knowingly hired them despite of their status and paid them in cash for less wages than required by law.
Finally, in October 2007, ICE agents armed with federal search warrants raided the two businesses and a residence on Godspeed Ave. in the Oyster Harbor community in West Ocean City. ICE officials were assisted in the raids by local law enforcement agencies. Six arrests were made during the operation including individuals from Mexico and the People's Republic of China. The six arrestees were transported to the ICE regional office in Baltimore and remained in custody until arrangements could be made to deport them to their countries.
Following the raids, the doors of both restaurants were chained shut and temporary closed signs were posted on them. A review of current Maryland tax records shows the property at 12902 Ocean Gateway is still owned by Zhu and Partners LLC although it will likely be forfeited per the plea arrangement when the defendants are sentenced in September. It is currently home to a different restaurant.