The Washington-based owners of the Noi Thai Cuisine restaurant in Bend agreed to a recommended prison sentence and payment of nearly $300,000 in unpaid taxes after they used “tax zapper” software to hide income at three restaurants.

The couple failed to report to the government more than $1 million in income, according to the U.S. Justice Department.

Pornchai Chaiseeha, 41, and Chadillada Lapangkura, 40, pleaded guilty last month in federal court to defrauding the government by hiding cash income from restaurants in Bend and Washington using the software in their point-of-sale systems.

Chaiseeha and Lapangkura, of Kent, Washington, are a married couple and part owners of a chain of Thai restaurants that operate in Oregon, Washington and Hawaii, which includes Noi Thai Cuisine at 550 NW Franklin Ave. in Bend.

The couple this month agreed to take a plea that could involve prison time. Sentencing hearings have been scheduled for Nov. 4 in U.S. District Court in Seattle. Their lawyers did not return calls seeking comment.

According to court documents, starting after 2010 and continuing through 2017, the couple’s restaurants employed a point-of-sale system called SmilePOS that featured “cash suppression” or “cash zapper” applications. This software modifies sales records by removing cash transactions from the records.

The restaurants involved in the scheme, including the Bend location, earned $1,034,750 in cash income that was never reported on state or federal tax returns, resulting in an agreed tax loss of $299,806, according to court documents.

The pair used the unreported cash to pay employees under the table, avoiding state and federal employment taxes.

Cash was also siphoned to bank accounts in Thailand, and those accounts were not reported on Lapangkura and Chaiseeha’s income tax returns between 2011 and 2016, according to the Department of Justice.

Prosecutors have agreed to recommend sentences of no more than two years in prison for Lapangkura and no more than 18 months in prison for Chaiseeha. U.S. District Judge James L. Robart is not required to go along with the couple’s plea deal.

The two have agreed to pay $299,806 in state and federal taxes. The IRS may assess other taxes, penalties and interest through its civil processes, according to agency spokeswoman Emily Langlie.

— Reporter: 541-383-0325, gandrews@bendbulletin.com