Restaurant Owners Admit Using ‘Zapper’ to Dodge Taxes

DULUTH (AP) — Two Duluth restaurant owners have admitted to using so-called "zapper" software to dodge nearly $300,000 in taxes.

Osaka Sushi Hibachi & Steak House owners Dan Xu and Zhong Wei Lin each pleaded guilty in St. Louis County District Court. They were allowed to avoid prison time in exchange for making immediate restitution and will each serve a year's probation.  The business itself was convicted as a corporation.

State Revenue Commissioner Cynthia Bauerly says the convictions are the first of their kind in Minnesota.

During their plea hearing, Xu and Lin admitted to using "zapper" computer software in 2015 and 2016 at the restaurant. The software automatically created a second set of accounting books that allowed the business to underreport sales, avoiding paying state and city taxes.