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A Bellevue restaurant owner is alleged to have hid sales transactions and pocketed nearly $400,000 in sales tax collected from her patrons in the first criminal case involving sales suppression software made illegal in Washington in 2013.

Yu-Ling Wong, owner of the Facing East restaurant on 103rd Avenue Northeast, is accused of having used “sales suppression software” to hide cash payments and filing false tax returns.

The software reportedly deletes transaction, then re-balances the company financial records to show a lower sales figure, reducing the business’ tax obligation. Money that patrons paid sales tax is then pocketed, as these unscrupulous retailers keep “two sets of books,” according to a statement released by Attorney General Bob Ferguson.

This is believed to be the first criminal case involving the sales suppresion software in the nation, he said.

“I will not tolerate businesses that line their pockets by stealing from taxpayers,” Ferguson said. “Using software to cheat on tax obligations is unfair to businesses that play by the rules and it robs Washington taxpayers of the money that is supposed to fund our schools, parks and roads.”

Using such software is a relatively new form of tax fraud and the state Department of Revenue is still learning how to detect its use, said the department’s director, Vikki Smith.

In 2013, Washington passed a law making it a class C felony for anyone to “sell, purchase, install, transfer, manufacture, create, design, update, repair, use, possess, or otherwise make available” software or hardware that deletes transactions.

Wong has been charged with first-degree theft, using said software and 21 counts of filing a false tax return.

She is expected to be arraigned on Feb. 17. If convitected, she could face up to 120 months in prison.

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