Woman accused of using tax suppression software at restaurant

Xiaoning Fan (Milford Police)

A New Haven woman is facing charges after authorities say she was using sales tax suppression software at her Milford restaurant.

Xiaoning Fan, 64, is accused of collecting but not remitting state sales tax, authorities from the state’s Department of Revenue Services said.

They said she used a “zapper,” which is a type of commercial ‘phantom-ware’ used to create fraudulent point-of-sale records that deliberately understate taxes actually collected.”

She was arrested at her Milford restaurant, Lao Sze Chaun and charged with possession of tax suppression software, first-degree larceny and willful delivery of a false return.

Officials say “violators are also liable for all taxes, penalties, and interest due to the state as a result of the crime, forfeit all profits associated with the sale and confiscation of the zapper device as contraband.”

“This arrest is a big breakthrough for DRS. We have been working with other states to develop our ability to detect and prosecute “zapper” fraud. What began as a routine tax audit became a DRS arrest when our specially trained auditors successfully detected illegal use of sales suppression software from 2008 to 2016 that resulted in over $80,000 of state tax evasion plus an additional $60,000 in penalty and interest charges. At DRS, we continue to step up our game in the fight to stop tax fraud,” said Dept. of Revenue Services Commissioner Kevin Sullivan.

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