DISTRICT ATTORNEY - NEW YORK COUNTY

FOR IMMEDIATE RELEASE
June 1, 2010

CONTACT: Erin Duggan
212-335-9400

DA VANCE ANNOUNCES GUILTY PLEA OF CONTRACTOR IN TAX  FRAUD  CASE

Owner of Oriental Construction LLC
Concealed Business’s Income to Commit More Than $250,000 in Tax Fraud

District Attorney Cyrus R. Vance, Jr., today announced that the owner of a construction company has pleaded guilty to evading personal income and business taxes, and underpaying premiums on workers’ compensation insurance. RONG H. LIANG was arraigned today in New York State Supreme Court and pleaded guilty to charges of Offering a False Instrument for Filing in the First Degree, a violation of the Tax Law, for filing a false resident income tax return, and a violation of the Workers’ Compensation Law, for fraudulent practices relating to a workers’ compensation insurance policy. 

LIANG is the president and owner of Oriental Construction LLC., a general construction company in Manhattan.  LIANG admitted that during a four-year period, he was able to conceal the true amount of his business’s gross receipts, by negotiating millions of dollars of client checks into cash. According to documents filed in court, LIANG used some of the money to pay himself.

“We continue to prosecute those who hide funds for personal gain,” said District Attorney Vance. “The defendant’s crime denied need funds to the City and State’s workforce by diverting funds intended for unemployment insurance and workers compensation claims.”

This investigation is one of several ongoing investigations by the District Attorney’s Office into revenue crimes involving the underground economy and is representative of the District Attorney’s Office’s partnership with City and State agencies.  The investigation into LIANG was conducted jointly by the Manhattan District Attorney’s Office, the New York City Department of Finance, the New York State Department of Taxation and Finance, the New York State Banking Department, the New York State Department of Labor, and the New York State Insurance Fund.
LIANG admitted to filing a false general corporation tax return for Oriental Construction LLC with the New York City Department of Finance and underpaying the premium on his business’s 2007 workers’ compensation policy obtained from the New York State Insurance Fund. He also filed a false 2007 New York resident income tax return with the New York State Department of Taxation and Finance.
           
According to documents filed in court, LIANG under-reported the gross receipts on the business’s City corporate return by more than $2.2 million and under-reported his taxable income on his 2007 New York personal income tax return by more than $185,000. LIANG was able to secure a lower insurance rate by failing to disclose the full amount of employee wages and the true classification of the employees covered by that policy.

At his sentencing in September, LIANG is expected to repay more than $729,000 in personal income, corporate, withholding, and unemployment insurance taxes, as well as the underpaid insurance premiums owed to the State Insurance Fund, along with accrued interest and applicable penalties.

District Attorney Vance thanked Commissioner David M. Frankel of the New York City Department of Finance and his staff, including Group Chief Auditor Michael Schenk and Auditor Jacqueline Almonor; Acting Commissioner Jamie Woodward of the New York State Department of Taxation and Finance and her staff, including Auditor Mukalia Rabiu;
Superintendent Richard H. Neiman, of the New York State Banking Department and his staff, including Director Ricardo Velez and Assistant Director Gia Morris of its Criminal Enforcement Bureau; Chief Deputy Executive Director Francine James of New York State Insurance Fund and her staff including Senior Investigator Curtis Brantley, II,  and Auditors Winston Sapigao and Jamie King; New York State Department of Labor Commissioner Colleen C. Gardner, the Office of Special Investigations and the staff of the Special Audit and Enforcement Unit of the Unemployment Insurance Tax Services Division. 

Assistant District Attorney Gilda Mariani, Chief of the Money Laundering and Tax Crimes Unit, handled this case with the assistance of the staff of the Unit, including Senior Accountant Investigator Irene Serrapica. Financial Intelligence Director David Rosenzweig of the Investigations Division also assisted. The District Attorney’s Office (NYPD) Office Squad, particularly Detective Robert Mistretta, assisted in the investigation under the supervision of Captain Ronald Haas.

Defendant Information:

RONG H. LIANG, 1/5/62
42-13 243 Street
Douglaston, New York

Charges

• Offering a False Instrument for Filing in the First Degree, a class E felony

• False Return; Personal Income and Earnings Taxes, a class E felony

• Penalties for Fraudulent Practices, a class E felony

A class E felony is punishable by up to 1⅓ to 4 years in prison.

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New York County District Attorney | duggane@dany.nyc.gov | 212-335-9400