They recently pleaded guilty to not paying payroll taxes and workmen’s compensation premiums for almost 800 of their employees. Now they’re facing up to eight years in jail plus back taxes and penalties of about $7 million. The Kwons allegedly involved others in the conspiracy, including their son and daughter. Those co-conspirators are awaiting their sentences to be handed down in August. None of the hotels they served were apparently aware of the fraud.
“These defendants lied on the backs of their employees who were cleaning rooms in some of the most prestigious hotels in San Diego and California,” California District Attorney Bonnie Dumanis said in December 2015, when the indictments were announced, according to the Union-Tribune report.
The couple created a dozen “shell companies” and then “hid” the number of people on their payroll so as to reduce their tax and insurance obligations. Employees, many of them immigrants, received their checks with different company names and logos. However, one of their competitors became wise to the practice and alerted a watchdog group who reported the Kwons to the state.