Howard Hsu, Tracy Chang, Corporate Income Tax Evasion, California 2023

San Francisco, California – A mother and son were convicted of conspiracy to file fraudulent corporate income tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Brian J. Stretch for the Northern District of California.

Howard Hsu, the owner and operator of Didsee Corporation, a Nevada company that provided advertisement marketing services to online websites and marketplaces, and his mother Tracy Chang, who was listed as the President, Secretary, Treasurer, and Director of the company, were found guilty of cheating the Internal Revenue Service (IRS) out of approximately $400,000.

The evidence presented at trial showed that Hsu and Chang conspired together to file fraudulent 2008 through 2009 corporate income tax returns, and an amended 2007 corporate tax return. They provided false summaries to Didsee’s return preparers, claiming business expenses that were never incurred and including Hsu’s personal expenses. Chang signed the fraudulent returns as Didsee’s President.

“Owners can’t use their businesses as piggybanks, paying personal expenses out of their corporate accounts and falsely claiming them as business expenses,” said Acting Deputy Assistant Attorney General Goldberg. “All employers are legally required to file accurate and complete returns and pay their fair share – just like their employees.”

Special Agent in Charge Michael T. Batdorf of IRS Criminal Investigation (CI) stated that this case was about greed and that Hsu fabricated millions of dollars in expenses while Chang knew the expenses were false. She maintained the books and signed the tax returns while Hsu gave the CPA the “cooked books”.

Hsu and Chang face a statutory maximum sentence of five years in prison for the conspiracy count and three years in prison for the false return counts. They also face a period of supervised release, restitution, and monetary penalties. A sentencing date has not been scheduled.

Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Stretch thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Colin Sampson and Trial Attorney Matthew Kluge of the Tax Division, who are prosecuting the case.

Related Federal Cases