The owner of a popular cosmetics company plead guilty in a Maryland court to tax law violations last week.
Bae Soo “Chris” Chon, who formerly owned and operated Mirage Cosmetics, admitted to a complex scheme that allowed him to evade roughly $1.8 million in taxes from overseas sales. Rather than meeting his obligations to the Internal Revenue Service, Chon explained that he diverted these funds to foreign bank accounts. In addition, Chon understated his federal and state taxes by $522,000 for tax years 2008 and 2009.
“Chon has agreed to pay $412,404 in restitution to the IRS for federal taxes owed for the tax years 2008 and 2009, plus penalties and interest,” the United States Attorney Office said. “Chon tendered two checks to the IRS on September 11, 2012 for $111,069.72 and $679,775.78, reflecting the agreed restitution and his counsel’s calculation of the amount of the applicable interest and penalties, for the tax years 2008 and 2009 respectively.”
In addition, Chon will be required to pay 50 percent of the highest aggregate balance he carried in his overseas accounts in 2009.
Mirage manufactures lipsticks, nail polishes, and blushes and markets the products to popular retail chains in the United States. However, the company was purchased by an international firm in 2011 for a reported $39 million, according to court documents.
The IRS has increased its efforts of late to crack down on companies that evade their tax obligations through the use of foreign accounts. In addition to working more closely with overseas banks to ensure that American clients are reporting accurately, the federal agency also developed a voluntary disclosure program for tax evaders.