(WHAS11) - Restaurants are a means to achieve the American dream for thousands of recent immigrants. Most are owned by people who work hard, pay their taxes and are an asset to their communities, but we've discovered others may be fronts for a scheme to pocket cash at your expense.
Investigative reporter Adam Walser has the story in this exclusive I-Team Investigation.
Restaurants like Long's Buffet are popping up everywhere, thanks to America's love affair with cheap, tasty Chinese food.
There are 41,000 Chinese restaurants in the U.S., more than all the McDonald's, Wendy's and Burger Kings combined.
Most of the Chinese restaurants are small family ventures. Zu chen, who goes by the nickname ‘Tony’, operates Long's Buffet in Nashville, Tennessee, with his wife Jin H Liu, or ‘Gina’. Gina’s name is on the business license.
Long's Buffet has only been open for a few months, but WHAS11 uncovered the fact that Tony and Gina have spent years in the restaurant business. They ran three restaurants in Louisville: King Cafe Buffet, Ocean Buffet and Chinatown.
The couple also operated Empire Buffet in Shepherdsville in recent years, before packing up and walking away from all of them.
So, how did they do it? It turns out Tony, Gina and Gina's sister, Jin X Liu or ‘Sue’ have a lot of different names. In documents we uncovered, Tony went by the name Xu Chen, Zu Xing Chen, Zu Zing Chen, Xing Chen and Zu Kai Chen.
We also discovered that each time Tony, Gina and Sue left the restaurants, they also left behind unpaid debts, in total nearly $700,000 to banks, landlords and suppliers, resulting in several recent judgments.
On top of that, they also owe the Commonwealth of Kentucky nearly $88,000 in taxes they already collected on nearly $1.5 million in sales.
Mack Gillim, with the Kentucky Department of Revenue, says what we discovered may be a trend experts call "pyramiding"
“If they collect x number of dollars and get to keep the extra 6 percent in sales tax, that's additional profit for them, or money in their pocket,” Gillim said.
“Pyramiding typically would mean a taxpayer who opens a business, doesn't pay his taxes, the business goes out of business, he turns around and opens a similar business,” Gillim added.
While it happens with many types of businesses, instances among Chinese restaurants appear high. On the Kentucky Secretary of State's corporation search website, we discovered that a large number of Chinese restaurants had recently been administratively dissolved by the state. We discovered a similar trend in Tennessee.
Many of the businesses switch operators multiple times or list the same operator with different names. But Tony appears to have masked his true identity completely.
Records WHAS11 found at the Kentucky DMV show he received several traffic tickets in Louisville using a Kentucky license number that doesn't exist.
The address Tony gave police comes back to an empty lot in Chicago and has the wrong zip code.
WHAS11 discovered Tony and Gina actually used to live in a $270,000 house in Jeffersontown. Those taxes have been paid in full, even though neighbors say they haven't seen anyone there in more than a year.
Tony, Gina and Sue now live in Tennessee, where they run Long's Buffet. After using our hidden camera the first time we talked, we identified ourselves and asked about all the unpaid debts. Tony said we had the wrong people and Gina had a similar reaction.
The expired tag on the Long's Buffet van is registered to Zu Chen aka Tony. Tony told WHAS11’S Adam Walser that he never owned a King Café Buffet. But Tony forgot that they had met before, at King Cafe Buffet. Adam was working on a story there three years ago.
And we've discovered Long’s Buffet in Nashville is not the only new restaurant the debtors have opened. There are two other locations, one in Cookeville and another in Chattanooga, Tennessee.
WHAS11 obtained accounting documents which purportedly show that Long's Buffet averages more than $2,000 a day in sales.
Another record we received indicates Gina, Tony and Sue pay themselves more than $6,200 each month. But new liens and lawsuits for thousands of dollars in unpaid debt have already started in Tennessee.
And the U.S. Small Business Association recently granted Long's Buffet a low interest $117,000 small business association loan, paid for with tax money.
As for the money Tony, Gina and Sue owe to Kentucky, Gilliam told WHAS11 that it would be very difficult to collect.
Coming up at 11 p.m., we'll introduce you to a contractor who says Tony and Gina tried to cheat him out of $18,000 dollars worth of construction work he did at Long's Buffet. And we'll tell you why officials say it's hard to go after Tony, Gina and Sue to get back the money owed to our state, even though WHAS11 told them where to find them.