2-14-2023 10:50am

The Owner of a San Bernardino County-based Construction Co. Sentenced to 2 Years in Federal Prison

Anita Johnson-Brown Editor

LOS ANGELES –The DOJ announced on February 13, 2023, Liang Tai Chen, 62, The proprietor of an Inland Empire business, and a resident of Los Angeles County, was sentenced today to two years in federal prison for filing false tax returns that failed to report exceeding $4.8 million in revenue over five years, resulting in Chen's failure to pay $1.6 million in taxes due to the IRS.

Chen the owner of a construction company in Chino California, Mass Development Inc. (MDI), was sentenced by United States District Judge Marc C. Scarsi. Judge Scarsi also ordered Chen to pay $1,642,935 in restitution.

In September 2022, Chen pleaded guilty to one count of aiding and assisting in the preparation of a fraudulent income tax return.

Chen managed MDI’s daily business operations and was listed as the proprietor of MDI on its financial documents from January 2013 through October 2017. To hide income, Chen deposited just a portion of the checks made payable to MDI into the company’s bank account and then cashed almost $5 million of other checks made payable to MDI at a financial institution and a local liquor mart that cashed checks.

Concerning MDI’s federal tax returns, The defendant provided the tax return preparer with statements from MDI’s business bank account and falsely advised the tax return preparer that all of MDI’s earnings had been deposited into the business bank account.

When the defendant did not inform MDI’s tax return preparer that he had cashed a substantial amount of business checks made payable to MDI, Chen caused MDI to falsely report the company's gross receipts to the IRS. This underreporting caused an underpayment of federal taxes for $1,642,935.

“Chen’s conduct was the result of his intentional choices and actions as a mature (he was in his 50s) and highly educated adult (master’s degree and degree in civil engineering) over a period of years, as opposed to a single aberrant or opportune act, in which [Chen] repeatedly filed false tax returns,” prosecutors argued in a sentencing memorandum.

IRS Criminal Investigation investigated this case. Assistant United States Attorney Steven M. Arkow of the Major Frauds Section prosecuted this matter.

By Anita Johnson-Brown