The husband-and-wife owners of a Korean restaurant in Sterling Heights have been charged with evading more than $165,000 in sales tax, according to the Michigan Attorney General’s Office.

Ki Yon Ahn, 73, and Seo Jong Yoo, 62, were charged with filing false tax returns and with possessing a “zapper” — an electronic device that creates false sales-tax records, according to a news release. 

The couple are owners of Chung Ki Wa, which has operated for at least a decade on 2101 15 Mile Road at DeQuindre, according to online reviews by diners, who mostly praised the eatery’s food and large portions. Ki Yon Ahn, reached Thursday at his restaurant, first said he didn’t speak English, then added: “You talk to my lawyer. Wait a second” before taking a reporter’s name and phone number. But his lawyer Michael Rex, based in Bloomfield Hills, did not contact the Free Press, which sent an email and left a phone message for Rex.

The couple were in court Monday for a probable cause conference although future court dates have not been scheduled, the release said. They were arraigned on July 21 before Judge Stephen Sierawski of the 41A District Court in Macomb County. Ahn and Yoo — who live on a lake in West Bloomfield, according to real-estate records — were charged with six counts of filing a false sales tax return, a five-year felony; and one count of possessing “an automated sales-suppression device” — a five-year felony.

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A sales-suppression device known as a zapper uses illegal computer software to manipulate the “Point of Sale database” of a restaurant or other business, according to the news release from the Attorney General’s Office. Without such a device, manipulating the sales records is “extremely difficult,” the news release said. But with a zapper, the restaurateur or other business owners can alter the database to under-report sales, thus reducing what is shown to be the 6% tax on total sales that is owed to the state, the news release said.

After learning that the restaurant was likely in possession of a zapper, agents of the Michigan Department of Treasury analyzed the restaurant’s reported sales and determined that the business allegedly had significantly under-reported its sales since 2013, the release said.

“Individuals or business owners intentionally committing fraud do so out of personal greed and must face the consequences,” Michigan Attorney General Dana Nessel said, in a statement about the case.

Michigan’s sales tax revenues are crucial to funding schools and have taken a steep dive during the pandemic, according to previous reports. In the latest figures available, state tax revenues in April were down about 43% from a year earlier, a decline blamed on the pandemic that has cut sharply into retail and restaurant spending.

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