Steven N. S. Cheung - Legal Troubles

Legal Troubles

On January 28, 2003, Cheung was indicted on thirteen counts by a US federal grand jury. The charges consisted of six counts of filing a false income tax return, six counts of filing false foreign bank account reports, and one count of Consipiracy to Defraud the United States. Cheung was accused of failing to report incomes from Hong Kong parking lots and other business. As a U.S. citizen, Cheung is obliged to report incomes from anywhere in the world, even if he does not reside in the United States. The law is uncommon in other countries. Cheung insists that he relied on the advice of his tax consultant, and did not know he was supposed to report the income in question.

Experts have said that ignorance of the U.S. tax policy is common among U.S. expatriates; the U.S. government generally does not pursue investigations of failures to report overseas income for non-residents. When discovered, offenders are often simply requested to turn in the unpaid tax. It is unknown why the U.S. government chose to investigate Cheung, and further to pursue a federal grand jury indictment; journalists have suspected ulterior motives.

Originally a professor at University of Hong Kong, because of the extradition agreements between the US and Hong Kong, Cheung has since stayed in mainland China, a country that has no such agreements with America. He now writes books and works as a columnist for the Hong Kong newspaper Apple Daily. Occasionally, he pays visits to various universities in mainland China.

From 1998 to 2003, Steven Cheung's company, Steven N. S. Cheung Inc. has a subsidiary in Seattle called Thesaurus Fine Arts, which specialized in Asian antique pieces. The store closed when a series of investigative reports in the Seattle Times alleged that many of the antiques were fake. In 2004, the Washington State Attorney General filed consumer fraud charges against Thesaurus Fine Arts. In 2005, Thesaurus Fine Arts settled for up to $550,000 in fines, attorney fees, and restitution. Cheung was dropped from the case as a result. Cheung has denied ownership of Thesaurus. Thesaurus is a subsidiary of Steven N. S. Cheung Inc., but it is claimed that Cheung is "not an officer, director or shareholder" of Thesaurus.