INDIANAPOLIS (Legal Newsline) - Indiana Attorney General Greg Zoeller has announced settlements with the owners of two Columbus spas to resolve allegations of uncollected and unpaid sales taxes.
Zoeller's office reached two separate settlements with Jiang Huang and Feng Bao Zhang, the owners of Daily Spa, and Xiaoping Hoob and Stevan Hoob, the owners of Ping Spa, to resolve jeopardy tax warrants against both businesses. Under the terms of the agreements, all four defendants will not operate in Bartholomew County, will not operate any type of business in the county for 20 years without court approval, will not operate or be employed by any massage therapy business in the county or any adjacent county for five years and will divest themselves from their spa businesses.
"Merchants who neither collect nor remit state sales tax and participate in other illegal conduct that detracts from the community's quality of life are not engaged in legitimate commerce," Zoeller said. "My office worked collaboratively with the City of Columbus and the Bartholomew County Prosecutor's Office to take appropriate legal action against these individuals to rectify an intolerable situation."
If Zhang or Huang violate their settlement, the state would be entitled to seek $100,000 in civil damages. The state would be entitled to collect $50,000 against the Hoobs if either of them violate their settlement.
Daily Spa allegedly incorporated as a business but never remitted any retail sales tax. Ping Spa allegedly never incorporated as a business nor registered as a retail merchant. The Columbus Police Department obtained a search warrant for financial records of the businesses and Zoeller's office obtained court orders requiring the closure of the businesses thereafter. The defendants were criminally charged on March 2, 2012.
Under the terms of one-year suspended sentences with probation against the four defendants, Zhang, Huang and the Hoobs must not operate or work in a spa or massage parlor. A violation of that or other probation terms could result in a jail sentence.
"The criminal sentences with probation are similar to what courts might realistically impose if the cases had gone to trial, and that the probation conditions and civil settlement terms will create barriers to the defendants participating in such activity in or near Columbus," Zoeller said. "If they decide to flout the law again, we will use the resources of my office to shut them down again."