Massage parlor owner didn’t pay taxes on income from ‘extra services’

A Denver area massage parlor owner will lose more than $186,000 after she skipped paying taxes to the Internal Revenue Service.

A Denver-area massage parlor owner will lose more than $186,000 after she skipped paying taxes to the Internal Revenue Service.

Jung Yoon Choi, formerly of Aurora, was sentenced by U.S. District Court judge to 19 months in federal prison followed by one year of supervised release for obstructing and impairing IRS rules. The 56-year-old pleaded guilty to the charge Jan. 14, the U.S. Department of Justice announced Thursday.

As part of her plea agreement, Choi agreed to forfeit $118,575 seized in December 2010.  She was also ordered to pay $67,560 in restitution to the IRS.

Choi owned and operated three massage parlors in the Denver metro — Ivy Spa in Denver, New Image Spa in Parker and Blue Pine Spa in Douglas County — from 2009 through 2010.

Choi raked in “substantial income” from each of her spas. Part of that money came from typical 30-minute to 60-minute massages. But for a “tip,” customers could receive “extra service,” the DOJ reports.

“Specifically, the workers would engage in sexual acts with customers in exchange for money. Choi was aware that prostitution was occurring at times in each of her spas and that business income was being generated from such activity,” a news release states.

Choi didn’t file personal income tax returns for 2009 and 2010. She did not report her business income for either year or pay any taxes to the IRS.

“Choi further impeded the IRS’s collection of taxes by several means, including using nominees on bank accounts so as to conceal her business income, conducting cash and business transactions using nominees, conducting financial transactions in amounts that were less than $10,000 so as not to trigger the filing of currency transaction reports and hiding and storing income in the form of cash hoards at various locations,” the release states.

A nominee is a person or business entity other than the ostensible account holder with access to the accounts.

Subscribe to Denverite’s newsletter here.

Business & data reporter Adrian D. Garcia can be reached via email at agarcia@denverite.com or twitter.com/adriandgarcia.

Adrian D. Garcia

Author: Adrian D. Garcia

Adrian D. Garcia covers business and trends for Denverite. He's covered business for The Fort Collins Coloradoan and serves as treasurer for the Colorado chapter of the Society of Professional Journalists.