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David Leung, a former Bay Area restaurant owner, pled guilty to eight felony counts for cheating his employees and defrauding the State of California through tax evasion. Leung owned Kome Japanese Seafood Buffet Inc. in Daly City, Tomi Japanese Seafood and Grill Inc. in San Jose, and Tomi Japanese Seafood Buffet in Concord. Leung pleaded guilty to eight felonies including six counts of wage theft, tax evasion, and filing a false tax return.

Sentencing will occur on April 23, 2024. The California Department of Justice’s (DOJ) Tax Recovery in the Underground Economy (TRUE) Task Force prosecuted the case in partnership with multiple state agencies.

The guilty plea was the result of an investigation by DOJ, CDTFA, EDD, and DIR. DOJ, CDTFA, and EDD are a part of the (TRUE) Task Force. TRUE began investigating suspected wage theft, sales and employment tax evasion, and suppression of sales by Leung in 2017. Leung was charged with stealing more than $893,000 in wages from employees and evaded $287,697 in sales tax to CDTFA and $171,820.55 in employment taxes to EDD.

Assembly Bill 1296 established the Tax Recovery in the Underground Economy Criminal Enforcement Program (TRUE) on January 1, 2020. Formerly known as Tax Recovery and Criminal Enforcement (TRaCE), TRUE is an important measure to support the state’s efforts to combat and deter underground economic crimes in California.

The case will proceed against two other defendants. It is important to note that every defendant is presumed innocent until proven guilty.

“Tax evasion and wage theft harm hardworking Californians trying to make ends meet and seriously impact our state’s ability to provide critical services for Californians,” said Attorney General Bonta. “David Leung purposefully evaded his obligations as a taxpayer and exploited his employees for his own gain. I want to thank the California Department of Tax and Fee Administration, the Employment Development Department, and the Department of Industrial Relations whose critical efforts were key to stopping his unlawful behavior. Today’s announcement should serve as a reminder: If you break the law and engage in fraud or theft, my office will hold you accountable.”  

“Tax evasion is not a victimless crime; Californians rely on that revenue to support vital services and programs,” said California Department of Tax and Fee Administration Director Nick Maduros. “Together with law enforcement and our fellow state departments, we are committed to taking aggressive action against those who try to defraud the system.”

“Together with workers and community organizations that represented or assisted the primarily Chinese speaking workers who were cheated out of their earned wages, my office was able to secure $2.6 million in compensation for these workers in 2020,” said Labor Commissioner Lilia García-Brower. “Wage theft is a crime that has profound impacts on families, and ripple effects throughout our communities and the economy. We appreciate the Attorney General’s office’s partnership on this case.”