Union County Businessman Admits Role in Tax Evasion Scheme | WPN World People News

A Union County, New Jersey man who owns and operates a medical supply company that he runs out of his home admitted to concealing $3,984,508 in business receipts and pleaded guilty to one count of tax evasion, U.S. Attorney Paul J. Fishman announced.

Yuxin Xie, 59, of Mountainside, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging one count of tax evasion for failing to report business receipts from his company, YX Enterprises.

During the tax years in question—2006 through 2010—Xie purchased diabetic test strips from numerous suppliers. He re-packaged and sold them to wholesale pharmaceutical and medical products distribution companies. Customer payments that Xie received were deposited into 11 different bank accounts at three different financial institutions. YX Enterprises was not a registered corporation, and any income received by YX Enterprises should have been reported on Xie’s tax returns.

Xie’s tax returns for the five years in question failed to report millions of dollars in gross receipts received by YX Enterprises. For each of the tax years 2006, 2007, and 2008, Xie’s tax returns reported that YX Enterprises had gross receipts of less than $10,000; Xie’s 2009 and 2010 tax returns contained no reference at all to YX Enterprises. YX Enterprises had in fact received nearly $4 million in business receipts during this five-year period.

Although Xie pleaded guilty to only one count of tax evasion for the 2009 tax year, the plea agreement requires that Xie admit to evading income taxes for all five years, and the court will take into account at sentencing the tax loss for all five years. The tax loss is $200,000 to $400,000.

Xie faces a maximum potential penalty of five years in prison and a fine of $250,000 or twice his gain from the offense, together with the costs of prosecution. Xie also agreed to file true and accurate tax returns and to pay to the IRS all taxes and penalties owed. Sentencing is scheduled for October 23, 2013.

Source: U.S. Attorney’s Office