Date: May 24, 2022 Contact: newsroom@ci.irs.gov PHOENIX — On May 19, 2022, Young Bok Lee pleaded guilty to Conspiracy to Defraud the United States. On March 23, 2022, Sung Hwan Lee pleaded guilty to Tax Evasion. Since 1998, Sung Hwan Lee has owned and operated a chain of clothing stores in and around Phoenix and Tucson, Arizona, doing business as BBB Fashion. Beginning no later than 2012 and continuing through 2016, he implemented a scheme to evade taxes by willfully underreporting income by directing his employees to give him any cash received from customers and to keep a second set of books and records to track true versus reported income and expenses. At his direction, the books and records provided to his accountant for purposes of preparing tax returns omitted cash receipts. As a result of this scheme, he intentionally underreported total income by $9,355,894. This underreporting resulted in a total tax due and owing of $3,696,786 for 2012-2016 on his personal returns. From 2006 through 2020, Young Bok Lee worked at BBB Fashion performing bookkeeping, payroll, and management duties. At Sung Hwan Lee's direction, Young Bok Lee (and other BBB Fashion employees) set aside cash received from customers and either gave it directly to Sung Hwan Lee or placed it in a safe for him to collect at a later time. Also at Sung Hwan Lee's direction, Young Bok Lee maintained a second set of books and records to track true versus reported income and provided false financial data to BBB Fashion's accountant for purposes of preparing tax returns. Sentencing for Sung Hwan Lee is set for September 21, 2022. Sentencing for Young Bok Lee is set for July 28, 2022. Internal Revenue Service – Criminal Investigation conducted the investigation in this case. The United States Attorney's Office, District of Arizona, Phoenix, is handling the prosecution.
