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One well-known Seattle-area Thai restaurant chain is trying to dig itself out of major legal trouble. The owners of Bai Tong — a 30-year-old brand with locations in Capitol Hill, Tukwila, Issaquah, and Redmond — pled guilty in a U.S. district court last Wednesday to charges of “impeding” and “obstructing” the IRS in collecting federal income and payroll taxes. But the chain’s marketing director, Tucky Wongpaka, tells Eater Seattle that all branches will remain open under the same ownership.
According to the plea agreement, wife-and-husband owners Chadillada Lapangkura and Pornchai Chaiseeha admitted to using a type of software that would intentionally delete cash sales from the Tukwila and Redmond Bai Tong locations, in addition to another restaurant, Noi Thai, that they own in Bend, Oregon. This effort was reportedly carried out from approximately 2010 to August 2017, with a tax loss of $299,806 on sales totaling more than $1 million.
The plea agreement, which Capitol Hill Seattle first reported, says that Lapangkura also allegedly transferred the skimmed cash to bank accounts in Thailand. The charges can result in a prison term of up to five years and a fine of up to $250,000, but — per this agreement — the government is recommending a prison term of no more than 18 months. A sentencing hearing is scheduled for November.
“Since the audit of 2017, the owners have reorganized everything to ensure that all is compliant with state and federal agencies,” Wongpaka says, adding that the owners have already paid a penalty of around $400,000. “Moreover, they held an event on May 18, 2019, to share their experience about being audited by the IRS to the Thai professional community in Washington to educate people about tax fraud and how to make sure their businesses are compliant.”
Indeed, in a remarkably frank speech, Lapangkura — whose mother, Chanpen, founded Bai Tong in 1989 — reflected on her experience two summers ago, when IRS agents first came to question her and her husband. “I woke up looking out the window and saw at least 10 cars parked outside of my house,” she says. “And then I saw men in uniforms running towards my house. Armed men, with bulletproof vests.”
In the translation of the speech, Lapangkura says, “we didn’t deliberately plan on wrongful doings forever” and says they had already fixed most of their mistakes by the time the IRS visited. “We weren’t taking out money for ourselves,” she adds later in the speech, after detailing the troubles that a restaurant might have hiring undocumented workers and paying them in cash. She also offers advice to the people in the audience on avoiding such issues, including hiring a good certified personal accountant, being completely honest with the authorities during an audit, getting a good lawyer, and making sure current business operations are clean.
“Get up quickly and move on,” she says. “It will pass just as other things in your life.”
UPDATED, August 20, 2019, 4:28 p.m.: This article has been updated with the date of the sentencing hearing.
