NEW YORK — In an ongoing crackdown on tax fraud in the garment industry, federal authorities last week arrested the owner of Y.K.Y. Inc., a Manhattan apparel wholesaler, and charged him with trying to evade corporate taxes.
According to the Internal Revenue Service’s criminal investigations unit, the suspect, Yeong Keon Yoo, tried to hide corporate income by remitting checks made out to his company at local check-cashing businesses, rather than depositing them into his bank accounts.
Last fall, two men were separately convicted of tax fraud in U.S. District Court in Brooklyn and each sentenced to more than a year in prison. Those executives had tried to hide more than $2 million in corporate income by using check-cashing establishments.
On March 11, Yoo was indicted on three counts of tax fraud for declaring false gross receipts on Y.K.Y.’s tax returns for the years 1999 through 2001. He turned himself in and was arrested at the offices of IRS criminal investigations in Manhattan and was released on bail, said Joseph Foy, an IRS special agent.
He pled not guilty, according to his lawyer, Richard S. Kestenbaum of Kestenbaum & Mark, a firm based in Great Neck, N.Y.
“Fraud is an ongoing battle,” Foy said.
Foy said the IRS has been investigating this particular method of fraud for years. Check-cashing establishments are often used by people who do not have bank accounts and many also provide services like wire transfers of money.
In the previous tax fraud cases, Jose Torres of New Arrivals Sportswear of Brooklyn was charged with two counts of filing false tax returns, hiding more than $2 million in corporate receipts. In October, he was sentenced to 21 months in prison.
Luis Estevex of Jasmine Fashions Inc., also of Brooklyn, was sentenced in September to one year and one day in prison.