Tong-Seng Luy, the owner of a Yuma doughnut shop, has been indicted by a federal grand jury for failing to pay overtime wages to some of his employees, according to The Yuma Sun. A business owner will not typically face criminal charges after failing to pay wages, but in this case Luy has been accused of falsely reporting to the U.S. Department of Labor that all of his employees had been paid the total amount of back wages that were agreed upon.
Luy allegedly promised to pay $27,000 in back wages to eight employees, but then withheld the money over a two-year period. Now, the owner of Arizona Donut faces 10 counts of concealment by trick, making false statements to the U.S. Department of Labor and willful failure to pay overtime.
A conviction for concealment by trick and making false statements reportedly carries a maximum sentence of five years in prison and a fine up to $250,000. Conviction of willful failure to pay overtime is punishable with up to six months in prison and a fine up to $10,000.
The federal charges come after the U.S. Wage and Hour Division of the Department of Labor conducted an investigation. Allegedly, Luy had not only withheld back wages, but he also demanded that his employees endorse their additional payroll checks back to him so that the money could be redeposited into his own account.
Luy is next scheduled to appear in court for an arraignment on May 18. At the arraignment, will see how the Arizona Donut owner will plead to the federal charges.