LOS ANGELES – The owner of an Inland Empire business was sentenced today to 24 months in federal prison for filing false tax returns that failed to report more than $4.8 million in income over a five-year period, resulting in his failure to pay $1.6 million in taxes due to the IRS.
Liang Tai Chen, 62, the owner of the Chino-based construction company Mass Development Inc. (MDI), who is identified in court documents as a resident of Los Angeles County, was sentenced by United States District Judge Marc C. Scarsi. Judge Scarsi also ordered Chen to pay $1,642,935 in restitution.
Chen pleaded guilty in September 2022 to one count of aiding and assisting in the preparation of a false income tax return.
From January 2013 through October 2017, Chen oversaw MDI’s daily business activities and was listed as the owner of MDI on its financial documents. To conceal income, Chen deposited only a portion of the checks made payable to MDI into the company’s bank account and then cashed nearly $5 million of additional checks made payable to MDI at a bank and a local liquor store that offered check-cashing services.
In relation to MDI’s federal tax returns, Chen provided the tax return preparer with statements from MDI’s business bank account and falsely advised the tax return preparer that all of MDI’s income had been deposited into the business bank account.
By failing to tell MDI’s return preparer that he had cashed a substantial portion of business checks made payable to MDI, Chen caused MDI to falsely report its gross receipts to the IRS. This underreporting resulted in an underpayment of federal taxes totaling $1,642,935.
“[Chen’s] conduct was the result of his intentional choices and actions as a mature (he was in his 50s) and highly educated adult (master’s degree and degree in civil engineering) over a period of years, as opposed to a single aberrant or opportune act, in which [Chen] repeatedly filed false tax returns,” prosecutors argued in a sentencing memorandum.