SAN FRANCISCO – Ming Lian Zhou was sentenced today to six months in community confinement to be followed by another six months home detention, along with over $7,000 in fines and restitution, for concealing the underpayment of wages from the U.S. Department of Labor, announced United States Attorney Brian J. Stretch and Department of Labor Office of the Inspector General Special Agent in Charge Abel Salinas. The sentence was handed down by the Honorable Richard Seeborg, U.S. District Judge, following Zhou’s September 16, 2016, guilty plea.
According to the guilty plea, Zhou, 58, of San Francisco, admitted he covered up the fact that he had not paid proper overtime wages to employees at two San Francisco restaurants he formerly owned, Hong Kong Lounge and Hong Kong Lounge II. Zhou failed to pay his employees $92,966.51 in overtime wages. A Department of Labor investigation uncovered Zhou’s conduct and, on March 16, 2012, the Department of Labor’s Wage and Hour Division notified Zhou that he was required to repay these employees. Zhou admitted that, on or about March 27, 2012, he signed and submitted to the Wage and Hour Division two Forms WH-56, in which he represented and agreed that he would pay his employees the assessed amount and would mail proof of that payment to the Wage and Hour Division. In April 2012, he deliberately signed and submitted to the Wage and Hour Division 46 Forms WH-58, in which he reported that he had paid 46 employees their overtime back wages. In truth, he had not paid the employees their overtime back wages. He nevertheless signed the forms, and asked his employees to sign the forms, confirming that the employees had received their wages.
Zhou was indicted by a federal grand jury on September 17, 2015. He was charged with one count of concealing a material fact from a government agency, in violation of 18 U.S.C. § 1001(a)(1), and three counts of interfering with commerce by threats of economic harm, in violation of 18 U.S.C. § 1951. Zhou pleaded guilty to concealing a material fact from a government agency. The remaining charges were dismissed.
This case originated with an investigation by the Department of Labor’s Wage and Hour Division into whether restaurants in the Bay Area were in compliance with the Fair Labor Standards Act.
“The high cost of living in the Bay Area makes restaurant workers particularly vulnerable to being cheated out of their lawful wages,” said U.S. Attorney Stretch. “Restaurant workers often work long hours for low wages. As in this case, workers frequently are punished or retaliated against for seeking the wages they have earned. They cannot afford to lose their jobs, so they are forced to accept an illegal wage. They should not have to fight this fight alone. Restaurant owners who cheat their employees out of fairly earned wages will be prosecuted by the Department of Justice.”
“The Office of Inspector General will continue to investigate individuals like Zhou, who exploit vulnerable workers and then conceal their actions by obstructing compliance investigations conducted by the Department of Labor’s Wage and Hour Division. We are committed to working with our partner agencies to preserve the integrity of all U.S. Department of Labor enforcement programs,” stated Special Agent in Charge Salinas.
Judge Seeborg sentenced the defendant to a three-year term of probation. For the first six months, the defendant will be required to reside in community confinement, otherwise known as a halfway house, where he will not be able to leave except for work and other limited activities. Following release from the halfway house, defendant will be required to serve a six-month period of home detention while wearing a location monitor to ensure his compliance. For the entire three years of his probation, the defendant’s home and businesses will be subject to searches by his probation officer to ensure that he is not involved in any other illegal activities. The Court ordered the defendant to pay a $5,000 fine, and restitution of $2,471.80 to three of the employees that the defendant forced to pay kickbacks.
The case was prosecuted by Assistant U.S. Attorneys Katherine Lloyd-Lovett and John Hemann, with the assistance of Marina Ponomarchuk and Matthew Swartsfager. The prosecution is the result of a multi-year investigation by the Department of Labor’s Office of the Inspector General and Wage and Hour Division.