There’s Good Nostalgia and Bad Nostalgia

Nifty Fifty’s is a nostalgia-themed chain of restaurants in the Philadelphia area. The chain is apparently successful, having won ten “Best in Philly” awards from readers of a Philadelphia newspaper. While the food is themed from the 1950s, the owners apparently longed for government out of the 1850s. Their unique method of helping the profitability of the chain was to not pay taxes.

The alleged scheme, which apparently went back to the founding of the chain in 1986, was to skim cash, pay employees in both paychecks and out of the skimmed cash, pay suppliers with skimmed cash, inflate expenses on their tax returns, and submit false tax returns to banks to obtain loans.

Apparently a plea deal is in the works. The company released a statement, telling

“We deeply regret our misconduct and accept full and complete responsibility for our actions,” the company said on behalf of the defendants. “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.”

Given the contrition of the owners, it’s likely the defendants–co-owners Robert Mattei and Leo McGlynn, and Brian Welsh, Joseph Donnelly, and Elena Ruiz–will probably escape the maximum sentences which could have run into decades at ClubFed. But given the gravity of the charges of tax evasion, structuring, and bank fraud, and the length of time the scheme ran, a visit to ClubFed is likely in the future for many of the defendants.

2 Responses to “There’s Good Nostalgia and Bad Nostalgia”

  1. […] Last month I reported on the Nifty Fifty’s chain of restaurants in Philadelphia. As expected, an indictment on tax charges was coming. And it appears that a plea deal did occur, as all five defendants pleaded guilty on Friday to various tax charges. […]

  2. […] Last year I reported on the inventive scheme used by the owners of Nifty Fifty’s, a Philadelphia area restaurant chain. Back in 1986, the restaurant was founded. The chain is themed on the 1950s; the owners apparently longed for the 1850s when there wasn’t an income tax. […]