Restaurateur pleads guilty to fraud, money laundering charges

SHARE Restaurateur pleads guilty to fraud, money laundering charges

Restaurant owner and chef Tony Hu, (left) leaves the Dirksen Federal Building after pleading guilty to charges of money laundering and fraud during his May 16 arraignment. | Lou Foglia / Sun-Times

The feds left Chicago restaurateur Tony Hu’s South Michigan Avenue condominium in 2014 with 100 tattered bags of receipts — and hard drives covered in hammer marks.

The celebrity chef and unofficial “Mayor of Chinatown” told reporters he had no idea what authorities were looking for during that October 2014 raid, which also targeted his restaurants in Chinatown, Uptown and the suburbs. But on Monday, Hu admitted he cooked the books, underreporting gross sales by more than $9 million and dodging more than $1 million in Illinois taxes while routinely glad­-handing with politicians trying to run a cash­strapped state.

Hu, 48, pleaded guilty to wire fraud and money laundering in the courtroom of U.S. District Judge Amy St. Eve. He is likely to face a sentence of between 41 and 51 months in prison under the terms of his 23­-page plea agreement with prosecutors. He also is expected to pay more than $1 million back to the Illinois Department of Revenue. His sentencing has been set for Aug. 22.

Sheldon Zenner, Hu’s attorney, said the case is not expected to affect the operation of Hu’s restaurants. He also said Hu has accepted responsibility for the crimes that led prosecutors to file charges against him Friday.

“He is a long­-standing member of the community in Chicago and in Chinatown,” Zenner said. “He has employed many, many people. He has had a career of community service and good works well before any of this ever happened.”

Hu is a naturalized U.S. citizen, according to his attorney. St. Eve said she would allow him to travel internationally, as long as he tells authorities where he is going. Hu spoke during the hearing in a quiet, raspy voice, and he listened to the judge with the help of a Mandarin interpreter — though he shushed the interpreter early on and tried to get by with English.

Politicians of all stripes have posed for photographs with Hu, including Republican Gov. Bruce Rauner and his Democratic predecessor, Pat Quinn. Mayor Rahm Emanuel once appointed him to the Commission on Chicago Landmarks, but he is no longer a member.

Rauner also named Hu to the Asian Americans for Rauner Coalition while running for governor.

The Chicago Sun­-Times first reported federal suspicions that Hu was cheating on his taxes.

Before raiding the restaurants, agents tailed Hu in his black Mercedes­-Benz as he drove from his condo to Chinatown. They even dined at his restaurants to get a closer look at the computer systems and receipts. They scoured bank records and emails documenting the restaurants’ sales, and determined the numbers often didn’t match the amounts submitted on the restaurants’ tax forms.

Agents left Hu’s condo in October 2014 with three damaged hard drives that forensic examiners determined had visible hammer marks and “damaged controller cards for the hard drive circuit boards,” according to court records obtained by the Sun­-Times. They also took about 100 ripped and torn bags full of receipts, the records show.

Prosecutors say Hu hid cash payments from the state between January 2010 and September 2014, using that money to pay employees and suppliers off the books. He also deposited the cash into his personal bank account, including $72,059 in August 2011, to pay for personal expenses.

Assistant U.S. Attorney William Ridgway told the judge there are no plans to charge anyone else in connection with the scheme. He also said Hu could avoid a forfeiture allegation by paying at least $1,087,674 to the Illinois Department of Revenue ahead of his sentencing later this year.

Hu told the judge, “I will pay it as soon as possible.”

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