New York man charged under Minnesota’s sales suppression devices law
ST. PAUL, Minn. – The Minnesota Department of Revenue announced that the Ramsey County Attorney’s Office recently charged Hailong Li, of New Hyde Park, N.Y., with two felony counts of aiding in the filing of false or fraudulent sales tax returns and one felony count of manufacturing and providing sales suppression devices. This is the first time an individual has been charged under Minnesota’s 2017 sales suppression devices law. The New York City Department of Finance assisted in the investigation.
According to the complaint, Mr. Li helped Shogun restaurant in Burnsville and Osaka restaurant in Duluth use the sales suppression software “Happy World” to modify their sales records in order to reduce the amount of sales tax they owed. Mr. Li allegedly told investigators that he was involved with the development of the sales suppression software “Happy World” but denied providing it to anyone in Minnesota after the state’s sales suppression device law went into effect or encouraging its use for illegal purposes. The complaint alleges that computer forensic evidence showed that Mr. Li was fully aware of how his software was being used in Minnesota.
“The 2017 sales suppression devices law gave the department a new tool to combat tax fraud by stopping it at the source – the people responsible for the development and distribution of sales suppression software,” said Revenue Commissioner Cynthia Bauerly. “Shutting down this illegal software helps level the playing field for Minnesota businesses who pay their fair share of taxes and expect other businesses to do so as well. We are grateful for the assistance of our colleagues at the NYC Department of Finance in this case.”
New York City Department of Finance Commissioner Jacques Jiha, Ph.D., said, "The New York City Department of Finance was pleased to assist the Minnesota Department of Revenue in its investigation of Jeff Li, and I congratulate the Minnesota Criminal Investigations Division, the DOF Office of Tax Enforcement, and the New York County District Attorney's Office for their work on this case. The Department of Finance stands ready to work with our colleagues across the nation to enforce city, state, and federal tax law."
Each tax-related felony charge carries a maximum penalty of five years in prison, a $10,000 fine, or both. Defendants are presumed innocent unless and until proven guilty.
Although most taxpayers comply with tax laws voluntarily, the department takes enforcement action against noncompliant taxpayers to ensure that tax laws are administered fairly.
Many of the department’s criminal case referrals come from public tips. There is a 24-hour tip line for anyone who suspects that a person or business is violating Minnesota tax laws. Local callers may dial 651-297-5195 or call toll-free by dialing 1-800-657-3500. Tips can also be submitted to the department by email at firstname.lastname@example.org. Tipsters may choose to remain anonymous.