Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.
Date: 01-29-2024
Case Style:
Case Number:
Judge: Gerald A. McHugh
Court: The United States Court for the
Plaintiff's Attorney: The United States Attorney’s Office for Eastern District of Pennsylvania
Defendant's Attorney:
Description:
Defendants Concealed More than $8 Million in Sales and Paid Employees “Off the Books” for Over a Decade
U.S. Attorney Jacqueline C. Romero announced that two owners of a popular South Philadelphia cheesesteak restaurant were sentenced to prison today for their decade-long conspiracy to defraud the IRS. The court sentenced Nicholas Lucidonio, 57, and Anthony Lucidonio Sr., 84, to 20 months in prison each.
According to court documents and statements made in court, the Lucidonios owned and operated Tony Luke’s, a cheesesteak and sandwich restaurant located in South Philadelphia. From 2006 to 2016, they hid from the IRS more than $8 million in cash receipts by, among other things, depositing only a portion of the cash they received into Tony Luke’s business bank accounts and providing incomplete information to their accountant, which caused their accountant to file false tax returns that substantially underreported business receipts and income.
The Lucidonios also committed employment tax fraud by paying employees “off the books” in cash. To evade detection, they paid most employees a portion of their wages “on the books.” The Lucidonios then paid the remainder of their wages in cash without withholding federal income tax, Social Security and Medicare taxes or paying those to the IRS. They did not report these cash wages to their accountant, which caused the accountant to prepare and file false quarterly employment tax returns with the IRS.
When a dispute over Tony Luke’s franchising rights arose between the Lucidonios and another individual in 2015, the Lucidonios became concerned that their tax fraud scheme would be revealed, so they directed that the prior year’s tax returns be amended to increase reported sales. The Lucidonios continued to hide their ongoing payroll tax scheme.
As a result of their tax fraud scheme, the defendants caused a loss of $1,321,042 to the United States.
“For a decade, these successful restaurateurs boldly cooked the books, cheating the government and honest taxpayers alike,” said U.S. Attorney Romero. “As this investigation and prosecution show, tax fraud is a crime with some pretty high stakes, with violators held fully accountable.”
“Anyone contemplating cheating on their taxes should know that IRS Criminal Investigation Special Agents work tirelessly, year-round, to investigate tax and financial crimes,” said IRS Criminal Investigation Special Agent in Charge Yury Kruty. “Our largest enforcement program is directed at the portion of American taxpayers who willfully and intentionally violate their known legal duty of filing and paying their taxes.”
In addition to the terms of imprisonment, U.S. District Judge Gerald A. McHugh ordered both defendants to serve three years of supervised release.
IRS Criminal Investigation investigated the case.
Outcome:
Plaintiff's Experts:
Defendant's Experts:
Comments: