Owner of Nevada City’s Stonehouse charged with evading payroll taxes | TheUnion.com

Owner of Nevada City’s Stonehouse charged with evading payroll taxes

Nikko Wu, the owner of Nevada City's Stonehouse Old Brewery, was arrested Tuesday night by Nevada City Police officers in partnership with state law enforcement officials on charges of willfully failing to file reports to the State of California Employment Development Department.

According to Nevada City Police Chief Tim Foley, Wu, 51, has been the subject of an investigation by local police in partnership with government officers from the Department of Alcohol and Beverage Control, Tax Recovery and Criminal Enforcement Task Force, also known as TRaCe.

In June 2014, the task force received information from Nevada City Police Department and the Department of Alcoholic Beverage Control regarding complaints at the Stonehouse, said California Department of Justice press secretary Kristin Ford.

The TRaCE task force conducted an investigation and found probable cause to arrest Wu for multiple felonies including payroll tax evasion.

"Wu is alleged to have paid employees to perform services at 'The Old Brewery' between the time periods of Oct. 1, 2011 through Sept. 30, 2014, while failing to report all employee wages to the Employment Development Department as required by law and failing to remit the associated payroll taxes," Ford said.

A criminal complaint was filed by the Attorney General's office alleging 18 counts.

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Wu is facing four counts of wilfully failing to file quarterly reports of contributions and wages paid to employees; four counts of willfully failing to pay contributions due to EDD; four counts of failing to file returns required by the unemployment Insurance Code; four counts of failing to collect and account for, and pay the unemployment tax required; and two counts of willfully making a misrepresentation to the EDD in order to lower her required contribution to unemployment benefits.

The California Attorney General's TRaCE Task Force includes representatives of the FBI, California Franchise Tax Board, California Board of Equalization, California Employment Development Department and the California Department of Alcoholic Beverage Control. TRaCE is a statewide task force created in 2014 to combat organized elements of the underground economy engaged in the manufacturing, importation, distribution and sale of pirated intellectual property, and other economic crimes resulting from the evasion of business and income taxes.

Wu has owned the Stonehouse since 2003, purchasing the 10,000-square-foot, three-story building for close to the asking price of $1.2 million.

The building's first incarnation was in 1852, one of the first breweries west of the Mississippi. It burned and was rebuilt in 1857 by Chinese laborers directed by Italian stonemasons.

When Wu first saw the hulking stone structure at the corner of Broad and Sacramento streets, it seemed to speak to her, she told The Union.

"It stood there like a giant," Wu recalled. "I just drove by and saw this building for sale and thought I should be the owner."

Wu, a Taiwan native, said she first arrived in the United States in 1989 to pursue a career in health-care administration at Tulane University in New Orleans. She then traveled through Europe before returning to Taiwan.

She subsequently moved to San Francisco, studying nursing in San Francisco before coming to Nevada County in 1992.

"If I could accomplish half the things I want for this place, it would be great," Wu told The Union when she bought the Stonehouse in 2003. "If I reach for the stars, I might only get to the moon."

In 2004, Wu leased the restaurant space inside the building to Mimi Boardman and Pam Scanlon, who filed for bankruptcy and closed down in 2008. Since then, Wu has struggled to find tenants and profitable uses for the Nevada City icon.

Wu is currently being held in county jail on a $200,000 bail. Stipulations of Wu's arrest require her to surrender her passport if bail is posted, because she is considered a flight risk.

She will be booked and arraigned in Sacramento, Ford said Wednesday afternoon.

To contact City Editor Liz Kellar, email lkellar@theunion.com or call 530-477-4229.