Friday, 8 October 2010

Rhode Island businessman sentenced for fraud, tax evasion

via CAAI

Friday, October 8, 2010

By Michael P. McKinney
Journal Staff Writer


PROVIDENCE — A man who says he endured more than five years in a forced labor camp in Khmer Rouge-ruled Cambodia in the 1970s was sentenced Thursday in U.S. District Court to two years in prison and ordered to pay $14.3 million in workers’ taxes for the temporary employees his company supplied to businesses.

Cheang Chea, 73, owner of S&P Temporary Help Service Inc. of Providence, which provided hundreds of temporary workers to about 30 Rhode Island companies, pleaded guilty in June to tax evasion, theft from a health-care benefit program and mail fraud over a period that began in 2003.

And as he awaited sentencing, he continued business as usual, the U.S. Attorney’s office said Thursday.

Prosecutors say that Chea has the means to pay the $14.3 million.

Chief Judge Mary M. Lisi said she understood that he experienced “unspeakable horrors” in Cambodia and that he should be commended for having built a business after arriving as a refugee in the country with so little. But, she said, “I have before me a paradox”: a man who became a successful professional but cheated employees and the government on taxes. She said he and his family have done well, noting he has a Mercedes Benz.

As Lisi imposed sentence, which includes a year of supervised release when Chea leaves prison, a woman began to cry uncontrollably. A man seated next to her in the federal courthouse on Kennedy Plaza picked her up and carried her from the courtroom.

Chea, through a translator, expressed regrets, but recounted being surrounded by killing in Cambodia and constant fear for his life.

Prosecutors said in court documents that Chea, based on a report submitted by the defense, has recently been diagnosed with posttraumatic stress syndrome and depression, and a prison sentence would afford him the opportunity to get treatment.

Assistant U.S. Attorney Dulce Donovan asked the judge to impose a 46-month sentence, at the low end of the pre-sentencing guidelines of 46 to 57 months. Along with ordering payment of the $14.3 million in withholding, Social Security and Medicare taxes, the prosecution wanted a $75,000 fine imposed. Donovan said the company under-reported to the government a substantial amount of the wages paid to the temporary workers.

Donovan said the prosecution believes the businesses Chea sent workers to paid people off the books and below minimum wage. Court documents said that Chea paid workers $200 in cash for a 40-hour work week or $5 an hour. The U.S. Attorney’s office said that the people Chea placed in temporary jobs were mostly East Asian and non-English speaking workers.

Defense lawyer Geoffrey Nathan said in court Thursday that Chea paid his workers the federal minimum wage. Court documents say the minimum was $7.40 for the period of Chea’s tax evasion.

S&P Temporary Help Service, in supplying workers to the companies, said it would be responsible for all payroll withholding. The companies would send S&P a check to cover what it charged for the workers. Chea would pay the workers.

While the prosecution acknowledged Chea’s trauma in Cambodia, Donovan said, he “is not someone who stands before this court claiming to not understand what his obligations are.” Rather, he decided “to pick and choose” how much money to report to the federal government and has “reaped the benefits” for his family.

Chea was reportedly known in the Asian immigrant community as a generous man who donated money to local Buddhist temples and to help build a hospital in Cambodia.

“He was helping rebuild Cambodia in what he’s doing, and helping people get jobs,” Molly Soum, former president of the Cambodian Society of Rhode Island, said in June after Chea’s plea agreement with federal prosecutors. The agreement rules out any appeal of Thursday’s sentence.

Court documents said, between 2003 and 2007, Chea deposited more than $996,000 into the bank accounts of relatives from his business and personal accounts.

Nathan said he has received countless letters in support of his client, and that Chea has said he wants to pay the money owed to the government.

No comments: