San Jose Owner of Valley Technology Services Sentenced to 15 Months' Imprisonment for Tax Evasion
Defendant Ordered to Pay Back $549,000 in Taxes Plus Interest and Penalties

SAN JOSE, CA—United States District Court Judge James Ware sentenced Huy Quoc Nguyen on Monday to 15 months in prison, followed by three years supervised release, and ordered him to pay restitution in the amount of $549,000 plus interest and penalties for tax evasion, United States Attorney Joseph P. Russoniello and Special Agent in Charge, IRS Criminal Investigation, Scott O’Briant announced.

Mr. Nguyen, 40, of San Jose, Calif., pleaded guilty on November 10, 2008 to tax evasion in violation of 26 U.S.C. § 7201.

According to the plea agreement and statements made in open court, Mr. Nguyen acknowledged that in 2000 and 2001 he was the sole owner of Valley Technology Services in San Jose, Calif., The IRS audited Nguyen’s 2000 tax return and during the audit Nguyen told the IRS civil revenue agent that his business checking account was used strictly for business and that he had used that account to prepare his Schedule C (Profit or loss from business) for his 2000 tax return.  Nguyen told the revenue agent that all deposits made to the business checking account were due to business income and that all checks from that account were for business expenses. Later in the process of conducting the audit, the revenue agent noted that there were numerous non-business checks that did not reconcile to any of the expense categories stated on the Schedule C. Nguyen admitted that those checks were for personal and not business expenses.  Nguyen further admitted that he knowingly failed to report gross receipts, ordinary income and interest income from VTS. He also improperly deducted non-business expenses as well as mortgage interest payments and real estate tax payments for property that he did not own. Nguyen admitted that the total amount of tax loss arising from his false 2000 and 2001 personal income tax returns was $549,000.

Nguyen was originally charged on September 25, 2007 by felony information with two counts of tax evasion, in violation of Title 26 U.S.C. §7201.

Joseph Fazioli is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Legal Assistant Jeanne Carstensen. The prosecution is the result of an investigation by the Internal Revenue Service - Criminal Investigation.

Further Information:

Case #: CR 07-00611 JW

A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges' calendars with schedules for upcoming court hearings can be viewed on the court's website at www.cand.uscourts.gov.