Friday, September 19 - Owners Sentenced For Hiring Illegal Aliens
WEST OCEAN CITY - The owners of two West Ocean City restaurants raided by U.S. Immigration officials last October, who later pleaded guilty to hiring and harboring illegal aliens and evading employment taxes were each placed on probation for 18 months and fined $50,000 last week in U.S. District Court, but their biggest penalty could be the forfeiture of a property assessed at over $2 million.
Bo Hao Zhu, 33, and his wife Siu Ping Cheng, 30, both of Ocean City, pleaded guilty in U.S. District Court in July to 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 at the time to federal employment tax evasion in an amount just under $7,000 for failing to report income paid in cash to illegal aliens they employed.
As majority owners of the corporation, Zhu and Cheng faced a maximum of 10 years in prison and a fine of $250,000, but U.S. District Court Judge Andre M. Davis last Friday sentenced the pair to 18 months probation. The judge also fined the corporation $50,000 for harboring aliens and inducing illegal aliens to reside in the U.S. Perhaps the biggest blow for Zhu and Cheng, however, was the judge's order for them to forfeit their interests in the property on Route 50 just west of the Harry Kelley Bridge they purchased from the Ocean City Marlin Club in 2004 for $2.3 million.
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. The Mikayo Sushi and Seafood Buffet re-opened briefly as a different restaurant this spring, but had closed its doors for good by mid-summer. With the sentencing hearing last Friday, Zhu and Cheng and their corporation were forced to forfeit the property valued at over $2 million.
The property is set to be auctioned on site next Tuesday at 1 p.m. Tranzon, a national broker and auctioneer is handling the auction of the property and the building, which was first built in 1989. The building, which was home to the Ocean City Marlin Club for a decade before the club sold it to Zhu and Partners LLC in 2004, is roughly 8,000 square feet, while the entire parcel measures just under 34,000 square feet. Perhaps most importantly, the property is equipped with 18 equivalent dwelling units.
It remains to be seen what the commercial property will draw at auction. According to state tax records, the assessed value of the property as of July 2008 was $1.98 million.