The Washington Post

Former Murky Coffee owner Nick Cho still owes $130,000 in back taxes

More than four years after pleading guilty to tax fraud, Nick Cho still owes the District of Columbia $130,000 in back sales taxes from his days running Murky Coffee on Capitol Hill, according to a lawyer with the D.C. Office of the Attorney General.

Gone but not forgotten: Former Murky Coffee owner Nick Cho now lives in California, but local authorities are still trying to get him to pay about $200,000 in back taxes, penalties and interest. (Photo by Sarah L. Voisin/The Washington Post)

Cho now lives in California where he co-founded and works for Wrecking Ball Coffee Roasters in the Bay Area, but he called in long distance to a probation hearing on Friday in D.C. Superior Court. Judge John Campbell was to decide whether Cho's five-year probation for tax fraud should be revoked because the coffee maven was not keeping up with his restitution and community service.

When Cho pleaded guilty in February 2010, he faced more than 40 years in prison for 82 counts of tax fraud.

Scott Peary, representing the D.C. attorney general's office, said Cho's last payment was apparently $1,000 on April 17, although Peary noted that his records were not completely up to date. By Peary's estimate, Cho still owes the District $130,000 in back sales taxes from Murky Coffee, which closed in 2008.

“His payments are substantially not what they should be at this point,” Peary said at the hearing.

Cho was originally supposed to pay $3,900 a month in restitution (following 11 initial payments of $276 per month). But the monthly payment was reduced to $1,000 in February 2012 during an earlier hearing to determine Cho's probation status.

During Friday's hearing, Peary from the attorney general's office suggested Cho produce federal and state income tax returns from 2010 to 2013 -- both personal and any tied to businesses he owns or operates -- by August 1. Peary also suggested that Cho present the court with three credit reports, with personal information redacted, to determine how much he can pay monthly.

All parties agreed that Cho should complete his 400 hours of community service by the end of the  year, although the amount Cho has already completed remains in dispute. Cho said he has racked up 150 hours; the court apparently has found evidence for only 95 hours.

Despite the District's arguments, Campbell did not revoke Cho's probation, although the judge did allow it to continue unsupervised. "Things, from where I sit, have gotten a little bit out of hand,” Campbell said about the restitution. The judge said it seemed to take a violation-of-probation hearing to motivate Cho to keep up his payments.

Cho declined to comment for the record. According to his LinkedIn page, Cho is a vice president at Wrecking Ball Coffee Roasters, which is registered in California under the name of his partner, Trish Rothgeb. Cho, according to a New York Times article from 2012, is the man responsible for first importing the trendy Kalita Wave brewing equipment from Japan. The Kalita flat-bottom dripper has become the go-to equipment for competitors in the World Brewers Cup.

Meanwhile, Cho still owes more than $70,000 to Arlington County from his years running another Murky Coffee location in Clarendon, which closed in 2009.

Chris Sadowski, deputy treasurer for litigation in the Office of the Treasurer in Arlington County, says Cho is supposed to pay the county $1,500 a month  based on a revised agreement reached in September 2012. But Cho hasn't made any sort of payment in at least four years, Sadowski says.

Cho originally owed the county more than $56,000 in back meals taxes, but because of penalties and interest, Cho now owes Arlington $72,066.47, Sadowski says.

The county continues to look for assets in Cho's name that it could seize to help cover the debt, but the deputy treasurer hasn't found much. He's also limited in scope. Sadowski can't go after any assets Cho may have in California unless Arlington files and wins a civil suit against Cho, which could then be used to pursue the defendant's assets in another jurisdiction.

"I haven't taken any active steps recently," Sadowski said about pursuing Cho, "and I certainly haven't forgotten about him."

Post reporter Ileana Najarro contributed to this story.

Tim Carman serves as the full-time writer for the Post's Food section and as the $20 Diner for the Weekend section, a double duty that requires he ingest more calories than a draft horse.



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