Cheungs, citing bias, to ignore court date

HONG KONG — A well-known economist facing U.S. federal tax-evasion charges said yesterday he will not return to the U.S. for his arraignment.

Steven Ng Sheong Cheung, 67, an economics professor who has taught at the University of Washington and, more recently, at the University of Hong Kong, again denied Justice Department allegations that he'd failed to report millions of dollars of income to the U.S. government.

He also disputes allegations that have prompted separate federal and Washington state investigations into the Thesaurus Fine Arts antiques store, partially owned by Cheung and his wife. Complaints have arisen that items from the Seattle store are newer and less-valuable than represented. No charges have been filed.

Cheung was charged last month in U.S. District Court in Seattle with one count of conspiracy, six of filing false income-tax returns and six of failing to file or falsely filing foreign bank-account reports. He faces up to 83 years in prison and nearly $4.8 million in fines if convicted.

His wife, Linda Su Cheung of Seattle, was charged with conspiracy and faces up to five years in prison and a $250,000 fine. She is now in Hong Kong.

Cheung had previously said he'd return to Seattle and plead not guilty. But yesterday, the Cheungs issued a statement saying they've decided not to appear for arraignment Thursday.

"We believe we will not be able to get a fair trial and that further conspiracies of one kind or another will likely continue to crop up to hurt us," their statement said.

Cheung said the tax charges and allegations about fake antiques were part of a conspiracy. He said he and his wife will return to the U.S. only if their side of the story is investigated fairly. In Seattle, Assistant U.S. Attorney Lawrence Lincoln declined to comment on the Cheungs' statements.

"We don't comment on what might happen," he said. "We'll wait until Thursday and take it from there. We expect and hope people will show up for their hearings."

The state Attorney General's Office and Federal Trade Commission began investigating after The Seattle Times published a report last month saying experts found a purportedly ancient Chinese pot and tile bought from the shop in Pioneer Square to be significantly newer than claimed.

Cheung contends the items cited in the report had been tampered with.

It was not immediately clear whether U.S. authorities would seek the Cheungs' extradition. Hong Kong and Washington have an extradition treaty.

An indictment issued Jan. 28 by the U.S. District Court charged that the Cheungs earned income from more than 50 commercial parking lots in Hong Kong and failed to report much of it — tens of millions of dollars — to any government.

The federal indictment made no reference to fake antiques but described the shop as one of at least 11 businesses around the world through which Cheung transferred parking-lot profits in attempts to disguise the source of the money.

"Although a significant portion of their income remained in Hong Kong, the defendants transferred a substantial amount of this income to the United States, which was utilized by them, and by others on their behalf, to acquire valuable assets, properties and investments in Western Washington and elsewhere, and to support the defendants' living expenses and lifestyles here and abroad," the indictment said.

They never reported that money on U.S. tax returns, it said.

Cheung said he earned about $2 million from a parking-lot business in Hong Kong, but was not aware that he had to pay U.S. taxes in addition to taxes he already had paid in Hong Kong. He said most of the $9.1 million he is accused of failing to report had belonged to his late mother.