Date: 05-06-2016

Case Style: United States of America v. Phillip Hui and Kathy Lei

Case Number: 1:16-cr-00221-RBK

Judge: Robert B. Kugler

Court: United States District Court for the District of New Jersey (Camden County)

Plaintiff's Attorney: Jason M. Richardson

Defendant's Attorney: David Sufrin and Jeffrey Zucker

Description: Camden, NJ - South Jersey Man Admits Hiring Illegal Immigrants, Failing To Collect Payroll Taxes

A Sicklerville, New Jersey, man today admitted his role in a conspiracy to evade payroll taxes on cash wages paid to illegal immigrants employed at his dry cleaning business, U.S. Attorney Paul J. Fishman announced.

Phillip Hui, 37, pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of conspiracy to obstruct and impede the IRS relating to the failure to collect, account for and pay payroll taxes and one count of harboring illegal aliens.

According to documents filed in this case and statements made in court:

Hui and Kathy Lei, 35, of Williamstown, New Jersey, owned New Eastern Cleaners in Voorhees Township, New Jersey. Lei, along with two other individuals, owned a house on South Main Street in Williamstown.

Hui knew he was required to verify that all of his employees were eligible to work in the United States, either as U.S. citizens or immigrants who had work authorization from Immigration and Customs Enforcement. However, at various times in 2012 and 2013, Hui and Lei hired foreign nationals B generally from Mexico or Guatemala B who did not have legal status in the United States. While working at New Eastern Cleaners, the undocumented immigrants lived in the South Main Street house.

At various times, Hui or Lei paid the undocumented immigrants in cash. They were required to work six days a week, approximately 10 hours a day and paid between $400 and $500 dollars per week. Their rent was part of the employment compensation. Hui also admitted that he would transport them or arrange their transportation between the South Main Street house and New Eastern Cleaners.

Hui admitted that when Lei filed Employer's Quarterly Federal Tax Return, Form 941 for all tax quarters in 2012 and the first three quarters in 2013, she only reported wages paid to legal employees of New Eastern Cleaners. She failed to report the wages and pay employment taxes for at least 13 undocumented immigrant employees in 2012 and at least 14 undocumented immigrant employees in 2013.

By filing the false tax forms in 2012 and 2013, Lei and Hui failed to pay the IRS employment taxes of at least $97,104 for the undocumented immigrant employees.

The conspiracy to obstruct and impede the IRS relating to the failure to collect, account for and pay over payroll taxes carries a maximum potential penalty of five years in prison. The harboring aliens charge carries a maximum potential penalty of 10 years in prison. Both charges carry a potential $250,000 fine. Hui=s sentencing is scheduled for Aug. 11, 2016

Lei pleaded guilty to the same charges on May 2, 2016. Her sentencing is also scheduled for Aug. 11, 2016.

U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), under the direction of Special Agent in Charge Terence S. Opiola, and special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea. He also thanked ICE’s Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris, for its assistance in this investigation.

Outcome: Guilty

Plaintiff's Experts:

Defendant's Experts:

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