Flushing Karaoke Bar Owner Bilked IRS Out Of $612K In Taxes: Feds

FLUSHING, QUEENS -- The owner of a Flushing karaoke bar faces years behind bars for bilking the IRS of more than $612,000 in a scheme to evade employment taxes, federal prosecutors said.

Kae Wook Lee pleaded guilty on Wednesday to failing to collect and pay employment taxes for his staff at the Mona Lisa 7 karaoke bar on 164th Street, said Richard Zuckerman, deputy assistant attorney general of the Justice Department's Tax Division.

From 2011 to 2013, the sole owner and CEO of Mona Lisa 7 Corporation diverted parts of his karaoke bar's income to bank accounts for shell corporations he created, court documents state. Lee used those accounts to pay his employees in cash without coughing up any employment takes to the IRS.

He then hid that cash payroll from his accountant, signing and filing tax returns that underreported his employees wages, prosecutors said. The scheme cost the IRS roughly $612,500, according to court records.

Lee now faces up to five years in prison followed by probation, and will likely have to cough up the money owed to the IRS plus penalty fees. His sentencing is set for Sept. 6.

(Lead photo: Kae Wook Lee's karaoke bar on 164th Street in Flushing. Image via Google Maps/November 2017)