Tax Evasion Case of 5 Restaurant Owners

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The 5 owners of the Nifty Fifty’s chain of restaurants were charged by the IRS for tax evasion, according to US Attorney Zane Memeger. The case was announced by Memeger, IRS Acting Special Agent in Charge Akeia Connor with the Criminal Investigation Division, and FBI Special Agent in Charge George C Venizelos. In a statement, Memeger confirmed the charge against the 5, namely Robert Mattei, Leo McGlynn, Brian Welsh, Joseph Donnelly, and Elena Ruiz, was that they hid about $15 million in gross receipts from their restaurants between 2006 and 2010. As a result, they avoided paying about $2.2 million in federal employment and personal taxes.

Robert Mattei, 73 is from Del Ray Beach, Florida, Leo McGlynn, 52 from Swarthmore, Pennsylvania, while Brian Welsh, 48 is from Springfield, Pennsylvania, Joseph Donnelly, 49 from Springfield, Pennsylvania and Elena Ruiz, 46 is from Drexel Hill, Pennsylvania.

Memeger said the entire conspiracy was a long-running plan to avoid paying millions of dollars in personal and employment taxes from their restaurant chain. According to the statement, the 5 owners have not paid taxes since the restaurant was established in 1986. On top of that, the 5 defendants are charged with also claiming tax refunds from income tax return forms they allegedly filed claiming they were due refunds based on the erroneous reporting of their incomes. Besides that, Mattei, McGlynn, Donnelly and Welsh are also charged with bank fraud while McGlynn and Donnelly also face charges of aggravated structuring of financial transactions.

The 5 were charged arising from information received on the conspiracy they were conducting. According to the information, in order to hide their taxable income, the 5 paid workers and suppliers out of unreported income and had false tax returns prepared that under-reported their income and falsely inflated expenses and deductions.
However, the 5 owners issued a statement through their lawyers saying:

"We deeply regret our misconduct and accept full and complete responsibility for our actions. We have been fully cooperative with the IRS to resolve these issues and have repaid all back taxes and penalties. We will continue to run each of our five restaurants in full compliance with the law.

We wish to thank all of our employees, friends, and business partners for their continued support as we move forward. Because this matter is still in the court system, we can have no further comment on this matter at this time."

The defendants each face differing lengths of time in prison if convicted, not including fines and penalties. If they are convicted, Mattei and Welsh face up to 40 years of imprisonment and five years of supervised release, while McGlynn and Donnelly face a maximum sentence of 50 years of imprisonment and five years of supervised release. If convicted, Ruiz faces a maximum sentence of ten years’ imprisonment and three years of supervised release.

 

Published In: General Business Updates, Criminal Law Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Darrin Mish, Tampa Tax Attorney, The Law Offices of Darrin Mish, P.A. | Attorney Advertising

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