Hennepin County restaurant owners, business entities charged with multiple tax crimes

ST. PAUL, Minn. – The Minnesota Department of Revenue announced that the Hennepin County Attorney’s Office recently charged Sufeng Zheng, of Plymouth, and her husband Ting Gui Zheng, of Maple Grove, with 26 felony counts each of aiding or assisting in the filing of false or fraudulent sales tax returns, and one felony count each of theft by swindle. Their associate Ming Zhu, of Blaine, is charged with eight felony counts of aiding or assisting in the filing of false or fraudulent sales tax returns, and one felony count of theft by swindle.

Additionally, the business entity Z & Chen’s Inc. is charged with 11 felony counts of aiding or assisting in the filing of false or fraudulent sales tax returns. The business entity T & K Inc. is charged with eight felony counts of aiding or assisting in the filing of false or fraudulent sales tax returns, and one felony count of theft by swindle. The business entity L & Z MN Inc. is charged with four felony counts of aiding or assisting in the filing of false or fraudulent sales tax returns. The business entity W & S Inc. is charged with three felony counts of aiding or assisting in the filing of false or fraudulent sales tax returns, and one felony count of theft by swindle.

According to the complaints, the Zhengs were de facto or “ghost owners” of Teppanyaki Grill & Supreme Buffet, with locations in Minneapolis and Fridley, while Ms. Zhu was the on-paper owner of the Fridley location. For multiple periods between May 2016 through October 2018, the Zhengs, Ms. Zhu, and the business entities designated as owning the restaurants at various times during this period used computer software to suppress sales transactions to underreport sales tax on the restaurants’ tax returns. During the execution of a search warrant of the Zhengs home, the complaints allege that investigators not only found evidence of the Zhengs ghost ownership of the two restaurants, but also double sets of sales reports as well as instructions and screenshots for the use the sales suppression software. According to the complaints, department analysts estimate that the two restaurants combined to underpay more than $810,000 in sales tax.

Each tax-related felony charge carries a maximum penalty of five years in prison, a $10,000 fine, or both. Felony theft by swindle carries a maximum penalty of 20 years in prison, a $100,000 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 tax.fraud@state.mn.us. Tipsters may choose to remain anonymous. 

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