CHICAGO — World renowned Chicago Chinese restaurant owner Tony Hu, known as the "Mayor of Chinatown," has been charged with intentionally failing to pay state taxes.
The owner of Lao Sze Chuan was charged with a count of wire fraud and a count of money laundering, according to the U.S. attorney's office.
He "intentionally withheld state taxes by underreporting the receipts paid in cash," the federal prosecutor's office alleged.
According to the complaint, Hu hid cash sales from the Illinois Department of Revenue. Hu Xiaojun, Tony Hu's legal name, allegedly started doing so no later than January 2010 to at least September 2014, according to the complaint.
"Hu modified the restaurants' sales records and caused the restaurants' sales records to be modified in order to conceal cash transactions that had occurred at the restaurants," according to the complaint. Hu and others got rid of daily sales summaries and "most of the transaction receipts for the restaurants' cash sales."
Katten Muchin Rosenman LLP, the law firm that represents Hu, said attorneys plan to release a statement on the case next week and would not comment Friday.
In 2014, the FBI raided a number of Hu's Chicago restaurants, including his flagship Lao Sze Chuan at 2172 S. Archer Ave., Lao Shanghai, 2163 S. China Pl., and Lao You Ju, 2002 S. Wentworth Ave.
Sealed search warrants show that Hu's restaurants allegedly underreported income by hundreds of thousands of dollars. According to the Sun-Times, the documents stated that Lao Sze Chuan in Chinatown deposited an average of nearly $231,000 per month in bank accounts but only reported $215,000 in income. Lao You Ju allegedly earned $94,000 every month but reported only $82,500 in income.
Lao Sze Chuan in suburban Downer's Grove reported $1.07 million in receipts in 2009, but listed only $657,000 on its tax return that year, the warrants state, according to the Sun-Times.
Before the raids, Hu was omnipresent in Chinatown social and civic circles and appeared alongside Mayor Rahm Emanuel and city dignitaries at various neighborhood ribbon cuttings.
When Hu opened an opulent offshoot of Lao Sze Chuan in Las Vegas, local news website there quoted Hu saying Emanuel joked with him, "I'm the mayor of Chicago, but you're the mayor of Chinatown."
The website for his restaurant group, Tony Gourmet Group, lists 13 restaurants. But news reports have suggested that he sold one or more of those restaurants.
Hu could not be reached for comment and employees at his flagship restaurant declined to comment Friday afternoon.
Sharyne Tu, who heads up the Chinatown Chamber of Commerce — the business group where Hu serves as a director — said the charges do not change the way people feel about Hu's cuisine.
“I think people just go to the restaurants for the food — because it’s good food,” Tu said. “I don’t think it will impact people going to the restaurants.”
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