College Point Spa Owners Admit To Multimillion-Dollar Tax Fraud

COLLEGE POINT, QUEENS -- A College Point spa with a checkered past can add felony tax fraud to its mounting list of run-ins with the law.

Spa Castle and its Corporate Officer Daniel Chon were ordered to pay $2.5 million in restitution and damages on Thursday after pleaded guilty to purposefully underreporting the spa's earnings. Investigators uncovered the multimillion-dollar tax fraud scheme after a whistleblower tipped them off in 2014, said New York Attorney General Barbara Underwood.

"We have zero tolerance for tax cheats who leave New Yorkers to foot the bill," Underwood said. "We're grateful to the whistleblower who helped bring this egregious conduct to light."

Spa Castle, located at 131-10 11th Ave., offers services such as massages, facials, saunas, swimming pools, restaurants and bars. It reportedly netted the spa upwards of $22 million per year between 2010 and 2013, according to prosecutors and court documents.

In 2014, a whistleblower filed a complaint against Spa Castle under the New York False Claims Act, prompting the Attorney General's Office to launch a civil investigation into the super spa

The State found enough evidence to later open a criminal investigation, which ended in investigators raiding the spa in August 2015. They found records showing the owners underreported millions of dollars earned to avoid paying roughly $1.5 million in required sales, corporate and MTA taxes.

The Attorney General's Office filed a criminal indictment against Chon and Spa Castle in March 2017. He pleaded guilty to third-degree attempted criminal tax fraud and the spa pleaded guilty to second-degree criminal tax fraud.

This isn't Spa Castle's first time in hot water with the law.

The spa was temporarily shut down in 2016 after a six-year-old girl got her hair stuck in a pool vent and nearly drowned, according to multiple news reports. Owners received nearly 50 Health Department violations between 204 and 2015, and in February were fined for violating child labor laws.

Spa Castle has also earned a reputation around the city as a "sex spa" after patrons were caught several times doing the deed in the midst of the spa's several pools, the New York Post reported.

Lead photo via Google Maps