Mankato's Shogun Sushi & Hibachi and its managers charged with multiple tax crimes

Mankato's Shogun Sushi & Hibachi and its managers charged with multiple tax crimes Photo: Google Maps

Updated: August 16, 2019 05:06 PM

The Ramsey County Attorney's Office has charged a co-owner and manager of a Mankato restaurant with multiple tax crimes, the Minnesota Department of Revenue announced Friday.

A release states Fang Chen, from Mankato, has been charged with two counts of knowingly aiding in the preparation of tax returns that were fraudulent or false, and Jian Chen, of Mankato, with one count of the same crime. Shogun Mankato, Inc., has also been charged with 33 counts of filing false tax returns.


According to complaints, the Chens managed Shogun Sushi & Hibachi, with Fang Chen being part owner of the establishment. The complaints allege that Fang and Jian Chen intentionally used their Point of Sale (POS) system logins to underreport taxable sales by cancelling thousands of cash transactions from March 2016 through June 2016. Investigators also found evidence of nearly 50,000 lines of transactions that had been deleted from the restaurant's POS system, according to the complaint.

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While no sales suppression software or "zapper" was found, the release states investigators found anti-forensic software installed on their POS system that could be used to remove sales suppression software.

Through their actions, the Chen's allegedly deprived the state over $200,000 in sales tax revenue.

"When a business intentionally uses illegal tactics to reduce their tax bill, it not only hurts law-abiding businesses who pay the correct amount, it breaches the trust of taxpayers who expect a business to pay the sales tax to the state on their behalf," Revenue Commissioner Cynthia Bauerly stated in the release. 

Each tax-related felony charge carries a maximum penalty of five years in prison, a $10,000 fine, or both.

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