Date: November 5, 2020 Contact: newsroom@ci.irs.gov Columbus, OH – The Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office announced that Martin Kao, of Gilbert, Arizona, formerly of Columbus, Ohio, pleaded guilty in U.S. District Court to income tax evasion relative to evading the assessment of income tax due to the Internal Revenue Service (IRS). "Kao intentionally suppressed cash sales from his restaurant business and provided false information to his return preparer," said Bryant Jackson, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. According to court documents, Kao attempted to evade the assessment of income taxes by suppressing the cash sales at Lantern Chinese Restaurant, in Blacklick, Ohio, which he was the sole owner from January 2014 through May 2017. Lantern Chinese Restaurant utilized a point-of-sale system to process customer sales. Kao suppressed the cash sales and did not deposit the cash into the business bank account. In addition, Kao used his business bank account to pay personal expenses. Kao paid his personal rental property mortgages and rent for an apartment out of the Lantern Chinese Restaurant's business bank account. He also used two corporate credit cards to pay personal expenses for him and his spouse. Kao failed to disclose to his accountant the cash sales that were suppressed from the point-of-sale system, the personal nature of expenses out of his business bank account, as well as a $40,000 check that represented a portion of the proceeds from the sale Kao underreported his taxable income by $316,957 for the 2014 though 2017 income tax years resulting in a tax due and owing of $97,058. Income tax evasion carries a maximum penalty of 5 years in prison and a $250,000 fine. This case is was investigated by special agents of IRS-Criminal Investigation and is being prosecuted by Assistant United States Attorneys Brenda S. Shoemaker and David Twombly.
