Tax Evasion – Tennessee Business Owner Thoeun Chan Pleads Guilty – Comments by Business Ethics Speaker Chuck Gallagher

March 11, 2008

How often I remember in my days as tax partner in a CPA firm, people saying that “as long as it’s cash, you can’t get caught.” They were inferring that they could avoid tax by just not reporting cash as income.

True…cash is harder to track, but most people don’t seem to connect the dots – every choice has a consequence and you do reap what you sow. Thoeun Chan, age 52, of Germantown, Tennessee recently faced those two truths as he plead guilty to tax evasion for failure to report cash as income on his tax returns.

According to the news release by the US Attorney’s office: Chan, owner and operator of Handiworks Jewelry and Winchester Pawn and Jewelry in Memphis , admitted that he failed to report approximately $274,875 in income for 2001 and approximately $277,277 in income for 2002. These false returns resulted in a tax loss to the United States of approximately $207,142.30.

It was stated at the hearing that Chan utilized an accountant to prepare his tax returns; however, he failed to provide the accountant with a large amount of the business revenues, namely cash receipts. On his 2001 return, Chan reported $0 taxable income for 2001 and only $40,524 in taxable income for 2002. During this time Chan enjoyed a lifestyle inconsistent with these reported levels of income and he acquired assets without a proportionate increase in liabilities. Evidence revealed during the plea hearing showed that Chan had approximately $312,000 in out of pocket expenditures in 2001 and approximately $604,000 in out of pocket expenditures in 2002.

The fallacy in Chan’s little scheme is spending patterns, lifestyle and income. Notice (this is real simple stuff), the IRS looked at Chan’s lifestyle his income and his debt. Now, if Chan had been increasing his debt and living off of debt, the scheme might have run a bit longer. However, I routinely say, every choice has a consequence – and Chan soon will face the consequence of his action which could result in 5 years in federal prison.

So there is no misunderstanding, I know what Chan is facing as I, too, spent time in federal prison for a tax crime. I am sympathetic to Chan’s plight, and understand that soon he will learn that the momentary gain does not equal the cost he will be required to pay.

As a result of my past deeds, I, today, speak to groups nationwide about Choices and Consequences. Do your employees make the best choices for your company—or for themselves? Are you ready for some straight talk about success, choices, and ethics from a business executive who lost it all…and gained more than he could ever imagine?
In an unusually vulnerable style, Chuck Gallagher explores the decisions we make through the veil of honesty, integrity, and ethics. Your audience will be touched by his personal stories and poignant lessons.

For information about my presentations, visit my website –