Owner of Restaurant Chain Pleads guilty to Obstructing Investigation

An owner of a chain of Mexican seafood restaurants in Santa Ana pleaded guilty to obstructing a federal investigation into his failure to pay minimum wage and overtime to his employees, as well as to filing a false tax return.

Victor Hugo Guzman, owner of Ostioneria Colima, which has locations in Los Angeles and Orange County, admitted that he failed to pay some employees overtime and paid some below minimum wage. From 2011 through 2014, Guzman paid some employees a flat rate of $320 per week, despite them working 12 hours a day, six days a week. This equals $4.44 per hour, when minimum wage was $8 per hour from 2011 to 2013, and $9 an hour starting in 2014.

To obstruct the investigation, Guzman told his employees to lie to investigators, hired someone to fabricate records, and fabricated time cards.

Guzman agreed to pay back taxes to the IRS, as well as pay $200,000 in back wages to his employees. His hearing is scheduled for April 23, 2021, where he will face a maximum of eight years in federal prison.