Company Owner Sentenced for Mail and Tax Fraud
Posted by Administrator (admin) on Jul 31 2009 at 8:26 AM
Tax & IRS Fraud >>

A Queens asbestos-removal company owner has been sentenced to four years of imprisonment for failing to pay $1.6 million in required workers’ compensation premiums by showing that he had only one employee, although he often used dozens of employees.

The company owner Chong-mun Chae, 71, is a South Korean. Andrew T. Baxter, the interim United States attorney for the Northern District of New York, said Chae will be would be deported after serving his sentence of 46 months as he was an illicit immigrant.

According to the prosecutors, Mr. Chae applied for workers’ compensation policies. He often wrongly claimed that he had only one employee who usually worked as a receptionist. Consequently, insurance companies charged him far lower rates than what he should be charged for the actual number of his employees and the dangerous nature of their work.

By changing the name of his company over and over again, Chae sought to avoid getting caught. Charlie Brown Services, Top Ace Services and K-One Service are some of the names he used.

Chae pleaded guilty to mail fraud as well as tax fraud. He was sentenced Thursday by Senior Judge Thomas J. McAvoy in Binghamton District Court. Chae has to pay all federal taxes he owed. The amount will be decided by the federal officials.

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