In addition to a term of imprisonment, Cuong Chi Quan will be required to pay over $8 million in restitution to the IRS Date: March 4, 2024 Contact: newsroom@ci.irs.gov Cuong Chi Quan, also known as “Roger Quan,” was sentenced last week to 10 months in prison for crimes related to a scheme to underreport his income by nearly $4.5 million, announced United States Attorney Ismail J. Ramsey and Kareem Carter, Special Agent in Charge of IRS–Criminal Investigation's (IRS-CI) Washington D.C. Field Office. The sentence was handed down by the Honorable Edward J. Davila, United States District Judge. On March 27, 2023, Quan was charged by felony information with one count each of willfully aiding and assisting in the preparation of a false tax return, in violation of 26 U.S.C. § 7206(2), and willfully violating foreign bank account reporting requirements, in violation of 31 U.S.C. §§ 5314 and 5322(a). On April 24, 2023, Quan pleaded guilty to both counts. Quan, 56, of Milpitas, Calif., owned and managed QXQ, Inc. (“QXQ”), a manufacturer of circuit board test fixtures based in Fremont, Calif. QXQ shipped its products to customers in the United States and abroad. According to his plea agreement, Quan admitted that, since before 2014, QXQ maintained two sets of QuickBooks bookkeeping files. One set of books recorded sales to customers in the United States and all of QXQ’s expenses. The second set of books recorded sales to customers in Asia. Quan directed QXQ’s customers in Asia to wire their payments to QXQ’s bank accounts in New Zealand. The income and expenses of QXQ were reported on Quan’s individual Form 1040 tax returns. Quan admitted that he provided his income tax preparer only with the QuickBooks bookkeeping file that recorded QXQ’s sales to customers in the United States and all of its expenses. Further, Quan acknowledged he knowingly did not provide his income tax return preparer with, or disclose to the tax preparer the existence of, the bookkeeping file that recorded QXQ’s sales to customers in Asia or the statements from his and QXQ’s foreign bank accounts, which included significant interest. Quan agreed his actions omitted over $4 million in 2017 income, causing his 2017 federal income taxes to be underreported by $1,783,339. The plea agreement contains further details of the scheme. For example, Quan admitted that he had signature authority over at least eleven foreign bank accounts in 2017. One of these accounts held a balance of at least $12,137,288.50 on April 15, 2018. Quan admitted that he knowingly did not report the existence of these accounts as required. Quan also did not report the interest earned in foreign bank accounts to his tax return preparer. Judge Davila imposed restitution to the Internal Revenue Service of $8,167,733 for underreported federal income tax for the years 2014 through 2018. Judge Davila further imposed a fine of $35,000, and a 3-year term of supervised release. Assistant U.S. Attorney Colin Sampson is prosecuting the case. The prosecution is the result of an investigation by the IRS-CI International Tax and Financial Crimes (ITFC) group, a team of Special Agents dedicated to investigating international tax crimes.
