Updated: August 25, 2020 12:01 PM
Created: August 25, 2020 10:14 AM
A New York man has been charged with aiding in the filing of fraudulent sales tax returns in Minnesota and providing sales suppression devices.
The Minnesota Department of Revenue said Tuesday that the Ramsey County Attorney's Office 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.
The department said it's the first time someone is being charged under Minnesota's 2017 sales suppression devices law.
According to a criminal complaint, Li is accused of helping Shogun restaurant in Burnsville and Osaka restaurant in Duluth use sales suppression software known as "Happy World" to modify their sales records and reduce the amount of sales tax they owed.
The complaint states that Li told investigators he was involved with the development of the software but denied providing it to anyone. However, computer forensic evidence showed he was fully aware of how the 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."
Each felony charge carries a maximum sentence of five years in prison, a $10,000 fine or both.
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