LI Man Helps Restaurants Fraudulently Avoid Taxes: Authorities

NEW HYDE PARK, NY — A New Hyde Park man is facing fraud charges after authorities said he helped a Minnesota restaurant unlawfully change its sales records to reduce the amount it owed in taxes.

Hailong Li was charged with two felony counts of aiding in the filing of false or fraudulent sales tax returns and a felony count of manufacturing and providing sales suppression devices, the Minnesota Department of Revenue said this week. Li is the first person to be charged under the state's 2017 law governing the use of sales suppression devices, officials said.

Li helped two Japanese restaurants, Shogun in Burnsville and Osaka in Duluth, use sales suppression software to alter their sales records, authorities said. Li told investigators he was involved in developing the computer software, but denied giving it to anyone in Minnesota after the law went into effect, and didn't encourage its use for illicit purposes, authorities said. However, authorities said computer forensic evidence showed Li knew how his software was being used in Minnesota.

“The 2017 sales suppression devices law gave the department a new tool to combat tax fraud by stopping it at the source – the people responsible for the development and distribution of sales suppression software," Cynthia Bauerly, the state's revenue commissioner, said in a statement. "Shutting down this illegal software helps level the playing field for Minnesota businesses who pay their fair share of taxes and expect other businesses to do so as well."

Li faces up to five years in prison and a $10,000 fine for each tax-related felony charge.