Queens Spa Evaded More Than $1.5M In Taxes: Attorney General

COLLEGE POINT, QUEENS — Owners of Spa Castle have allegedly evaded $1.5M in taxes by underreporting their yearly income of $22M and paying employees in cash between 2010 and 2013.

The owners, Steve Chon, 57, Daniel Chon, 54, and Victor Chon, 50, and Stephanie Chon, 29, are charged with 11 felonies, according to a Wednesday press release from Attorney General's office.

The spa, located at 131-10 11th Ave. in College Point, offers massages, facials, saunas and swimming pools. Customers are charged an entry fee and then pay extra for additional services.

New York State Attorney General’s Office investigators conducted a search of the College Point location in August 2015 and found documents that showed the spa owners had underreported their income and paid their employees in cash between 2010 and 2013.

All 11 charges stem from the spa owners' alleged failure to pay more than $1.5 million in taxes between 2010 and 2013 by not reporting millions of dollars in revenues. The College Point spa had a yearly revenue of $22 million in that time period, according to the prosecutor. Each of the owners were charged with two counts of grand larceny in the second degree, eight counts of criminal tax fraud in the second degree and one count of criminal tax fraud in the third degree.

“The scale of theft alleged in this case is staggering,” said Acting Tax Commisioner Manion. “If proven, these felony crimes show a blatant disregard for New York State law and all law-abiding New Yorkers and business owners, who shoulder the added tax burden and suffer the loss of revenue used for vital programs and services. We’ll continue to work with Attorney General Schneiderman and all our partners in law enforcement to prosecute these cases and ensure a level playing field.”

If convicted, the owners of the spa face five to 15 years in prison.

The defendants were arraigned Wednesday before the Queens County Supreme, who set the bail at $100,000 for each.

"Spa Castle and the Chon family denied these allegations at the arraignment," said Alfredo Mendez, the attorney representing the Chon family. "It must be noted that these allegations date back more than five years. We will address them in court."

The case was the result of a joint effort between the New York State Attorney General’s Office and the Department of Taxation and Finance, Criminal Investigations Division.

Image via Google Maps