NASHVILLE, Tenn. (WKRN) — Five people who were charged last year in “an undocumented worker harboring scheme” connected to eight restaurants around Middle Tennessee have pleaded guilty, officials announced Wednesday.
In plea hearings that wrapped up this week, the Department of Justice (DOJ) said 46-year-old Zhongzhi “Tommy” Zhuo of Hendersonville, 37-year-old Jianping “Alan” Zhuo of Hendersonville, and 35-year-old Jianhua “Jason” Zhuo of Gallatin, pleaded guilty to the following charges:
- Conspiracy to harbor aliens
- Conspiracy to commit money laundering
- Conspiracy to defraud the U.S. by failure to collect and pay employment taxes to the Internal Revenue Service (IRS)
In addition, Tommy Zhuo reportedly pleaded guilty to two counts of harboring aliens, as well as failure to pay employment taxes.
Meanwhile, 32-year-old Lili Wu of Gallatin, and 38-year-old Xiaofen “Joyce” Zhuo of Hendersonville, both pleaded guilty to conspiracy to defraud the U.S. by failure to collect and pay employment taxes to the IRS, according to the DOJ.
“These defendants profited by exploiting and concealing the existence of vulnerable people,” said Acting U.S. Attorney Thomas J. Jaworski. “I commend our law enforcement partners for their tireless efforts to bring them to justice and to remove individuals from circumstances in which they were exploited.”
Based on records filed with the court, the defendants allegedly harbored people who were in the U.S. illegally by offering them employment at the restaurants and providing them with housing and transportation.
The “scheme” also involved paying undocumented workers in cash to avoid paying employment taxes, as well as conceal the ongoing fraud, officials said.
📧 Have breaking come to you: Subscribe to News 2 email alerts →
The DOJ said the restaurants identified in the indictment include the Fuji Japanese Steakhouse, with locations in Hendersonville, Goodlettsville, and White House; Bonfire Mongolian Grill, with locations in Hendersonville, Clarksville, Mount Juliet, and Spring Hill; and the Koi Japanese Steakhouse in Gallatin. Some of these restaurants are reportedly under new ownership.
These guilty pleas come after a federal grand jury returned a nine-count indictment in July 2022, according to the department. The defendants were then arrested by federal agents.
In addition, officials said the defendants agreed to forfeit homes that were used to facilitate violations of these crimes and funds derived from the commission of these crimes.
According to the DOJ, the resulting forfeiture included properties in the 100 block of Huntington Place in Hendersonville, the 1100 block of Peninsula Drive in Gallatin, the 200 block of Trey Court in Clarksville, and the 1000 block of Bradford Park Road in Mt. Juliet; nine bank accounts totaling approximately $412,209.14; and approximately $434,400.24 in cash.
The U.S. also claimed the scheme caused a tax loss of $1,259,348 for the IRS, so officials are planning to seek restitution.
This case — which was reportedly investigated by Homeland Security Investigations (HSI), IRS-Criminal Investigation (CI), the Tennessee Bureau of Investigation, and the Hendersonville Police Department — is being prosecuted by Assistant U.S. Attorney Robert S. Levine.
“These employers exploited a vulnerable population and defrauded the government for their own profit. The guilty pleas are a prime example of the successful outcome when local, state, and federal partners collaborate to protect workers and American businesses,” said Special Agent in Charge Rana Saoud with HSI Nashville. “Through its investigations into exploitative employers, HSI protects the U.S. labor market, workplace conditions, and the dignity of individual workers, who are often taken advantage of through dangerous work conditions, underpayment, and using those noncitizens as a business model to maximize profits.”
“Unscrupulous businesses who willfully skirt their tax and legal workforce obligations must be held to account,” added IRS-CI Special Agent in Charge Donald ‘Trey’ Eakins. “Employers who deliberately deflect these obligations undermine what is owed to the U.S. government in payroll taxes and other fees, in addition to creating an unfair economic advantage over law-abiding business owners who play by the rules.”
When the defendants are sentenced later this year by a federal district court judge, the DOJ said they face between five and 20 years in prison.