Part owner of international trading business sentenced to three years in prison for tax fraud

 

Date: February 11, 2020

Contact: newsroom@ci.irs.gov

A Saratoga, California, businessman was sentenced to 36 months in prison today.

"The defendant's luxury residence and vehicle reflect his true income, not the income he falsely underreported to the IRS," said Kareem Carter, Special Agent in Charge IRS Criminal Investigation. "His crime was compounded by lying to the IRS when he was audited. Today's sentence sends a clear message that those who intentionally conceal income and evade taxes will be held accountable for their crimes."

"The integrity of our tax system relies on all taxpayers filing accurate tax returns and dealing honestly with the Internal Revenue Service," said Principal Deputy Assistant Attorney General Zuckerman. "Those who commit tax crimes by cheating on their returns and dealing falsely with the IRS expose themselves to criminal prosecution and prison."

According to the evidence presented at trial and information provided to the Court, Jyh-Chau "Henry" Horng was a minority owner of a home-based international trading business that sold scrap metal to China while that country was undergoing its economic and infrastructure boom. From 1999 through 2008, Horng failed to report on his tax returns millions of dollars in profits from the business. Horng and his wife used the business profits to buy residential properties in New York City and the San Francisco Bay area, invest over $5 million in a Milpitas shopping center, and purchase a Bentley. During an IRS audit of the returns, Horng made false statements to the Internal Revenue Service (IRS), including that neither he nor his wife had any foreign bank accounts. After the audit, Horng failed to file any tax returns from 2009 through 2018.

Horng was convicted by a jury in June 2018 of filing false tax returns and making false statements to an IRS agent while under audit. After the jury verdict, Horng also pleaded guilty to lying on a bank mortgage application.

In addition to the term of imprisonment, U.S. District Judge Beth Labson Freeman ordered Horng to serve three years of supervised release and to pay $1.1 million in restitution to the United States.

This investigation was conducted by special agents and a former special agent of IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Michael Pitman and Trial Attorney Christopher Magnani of the Tax Division with the assistance of Paralegal Specialist Jonathan Deville for his assistance during the trial.