EVERETT — The owner of popular sushi restaurants in Lynnwood and Everett kept a “double set of books” to hide his true business earnings from the Internal Revenue Service, new charges filed in federal court say.
Federal prosecutors allege Si Yong Kim, owner of the two Oshima Sushi restaurants in Everett and Lynnwood, understated his proceeds by over $1.7 million between 2016 and 2020, resulting in a tax loss upwards of $500,000. He deposited earnings into three personal accounts, and the rest in a safe deposit box. The money was partly used to finance his properties in Georgia and Mukilteo, according to the charges filed last week.
Kim faces one count of tax evasion in U.S. District Court in Seattle.
Workers at both restaurants Thursday said Kim was unavailable to comment on the charges.
Kim has owned both sushi establishments for about a decade at 11108 Evergreen Way and inside H Mart at 3301 184th St. SW, according to business license records. He took an active role in the day-to-day operation and handled the bookkeeping — which he reportedly had done by hand, according to court documents.
Prosecutors allege Kim gave his tax preparer false earnings to provide to the IRS for four years, resulting in a $511,750 in total tax loss.
Federal court documents list both Oshima locations under the name “Si Joy Inc.” The court records say the Everett restaurant filed taxes under the name “Si Joy,” while the Lynnwood business filed taxes as “Oshima Sushi.”
For both Oshima establishments, Kim kept one set of books in which he accurately reported daily expenses, cash receipts, credit card receipts and tips. The restaurant owner would then write a “CPA number” next to the accurate figures, omitting all cash receipts and understating credit card receipts by thousands of dollars, the charges say.
Kim would provide that false number every month as the monthly gross receipts for each restaurant, prosecutors allege. He would also direct his tax preparer to use those numbers to prepare tax returns for the businesses.
A second set of books Kim used to mimic the first set only listed two numbers a day: an accurate report of credit card receipts and 10% of the cash receipts, according to the charges.
During an IRS investigation last year, Kim told agents his restaurants generated mostly credit card receipts, according to court documents.
When asked if he ever received cash, he reportedly replied: “Hardly, not much.”
Prosecutors also allege Kim “significantly overstated” his expenses on end-of-year reports, doubling the cost of his vendors. At the same time, the sushi restaurant owner would pay some of his employees in cash without reporting it to his tax preparer, understating his labor expenses.
“Kim knew federal tax law imposed a duty on him, and Kim intentionally and voluntarily violated that duty,” prosecutors wrote in the charges.
Court records suggest Kim did not have legal representation in the case as of this month.
Both restaurants were open Friday.
The Oshima location in Everett shares a wall with Zab Thai, where then-owner Kay Fuengarom was sentenced to two years of probation in 2019, for a tax fraud scheme using software to underreport how much the restaurant made.
Zab Thai also remained open this week, though Fuengarom was no longer listed as part of the ownership in state records.
Maya Tizon: 425-339-3434; maya.tizon@heraldnet.com; Twitter: @mayatizon.
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