PHOENIX — The owner and operator of Arizona's BBB Fashion stores has been convicted of tax evasion after he underreported his income by more than $9 million.
Sung Hwan Lee, 64, of Peoria recently pleaded guilty to tax evasion and was sentenced to two years in federal prison, followed by three years of supervised release.
The U.S. Attorney's Office of Arizona said Lee directed his retail employees to give him the cash generated from sales and then prepare falsified records to omit the cash receipts.
This "cash-skimming" scheme resulted in Lee underreporting his income by more than $9.3 million between 2012 and 2016, resulting in a tax loss of over $3.6 million to the federal government.
Prosecutors say the bookkeeper of BBB Fashion was previously convicted of conspiring to defraud the government and will be sentenced on Dec. 1.
BBB Fashion has retail locations in Avondale, Maryvale, Laveen, west Phoenix, and Tucson.
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