Monday, January 30, 2012

Channavel “Danny” Kong Sentenced to Two Years in Prison for Bribery and Tax Scheme


CAMDEN, NJ—The former owner and operator of Philadelphia temporary labor firm Sunrise Labor was sentenced today to 24 months in prison for bribing a senior investigator with the New Jersey Department of Labor & Workforce Development (LWD) and failing to pay taxes, U.S. Attorney Paul J. Fishman announced.

Channavel “Danny” Kong, 40, of Philadelphia, previously pleaded guilty to an information charging him with one count each of bribery and failing to pay federal payroll taxes. Kong entered his guilty plea before U.S. District Judge Noel L. Hillman, who also imposed the sentence today in Camden federal court.

According to documents filed in this case and statements made in court:

From 2006 to 2009, Kong owned and operated Sunrise Labor (Sunrise), which was in the business of providing temporary employees to client businesses, including businesses located in New Jersey. Kong admitted that from 2006 to January 2009, he made illegal cash payments to Joseph Rivera, 55, of Winslow, N.J., a senior investigator with LWD’s Division of Wage and Hour Compliance. Kong admitted he paid Rivera bribes totaling approximately $55,281 with the intent to influence Rivera not to conduct audits and inspections, including inspections and audits examining Sunrise’s compliance with state payroll tax obligations.

Kong also admitted that he was responsible, as the operator of Sunrise, for withholding, collecting, and accounting for and paying to the U.S. all employment taxes imposed by the Internal Revenue Code and that he willfully failed to collect and truthfully account for these taxes, which caused a tax loss to the IRS of between $80,000 and $200,000.

In addition to the prison term, Judge Hillman ordered Kong to serve three years of supervised release and to cooperate fully with the IRS in paying his outstanding federal tax obligations. Additionally, Judge Hillman ordered the defendant to pay the state of New Jersey $15,000 in restitution.

On March 30, 2009, Rivera pleaded guilty before Judge Hillman to an information which charged him with one count each of solicitation and acceptance of a bribe, and tax evasion. At his plea hearing, Rivera admitted that Kong was not the only person from whom he accepted bribes, which totaled more than $1.86 million from owners and operators of temporary labor firms. In exchange for these payments, Rivera refrained from inspecting these firms and falsely certified that they were in compliance with state wage and hourly statutes and regulations. As part of his plea, Rivera forfeited $1.86 million. The forfeitures included $120,400 in cash; two properties in Ocean City, N.J.; a property in Fort Lauderdale, Fla.; a 2008 Lexus ES 350 automobile; eight gold plates; and numerous other gold and silver coins. Rivera awaits sentencing.

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