Nifty Scheme Lands Five at ClubFed

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.

What did the five owners do? From the DOJ press release:

The restaurant owners paid employees a portion of their wages with unreported cash in order to evade payroll taxes; paid suppliers with unreported cash; and had false tax returns prepared that under-reported income and falsely inflated expenses and deductions. Just between the years 2006 and 2010, the defendants deliberately failed to properly account for $15.6 million in gross receipts, thereby evading $2.2 million in federal employment and personal taxes. In the course of their conspiracy, Mattei, McGlynn, Donnelly, and Welsh committed bank fraud by submitting to the bank bogus income tax returns in order to secure several business loans.

The five owners of Nifty Fifty’s pleaded guilty to the various charges and agreed to full restitution. The IRS has received over $4.5 million in restitution to date. The five owners all received time at ClubFed, ranging from 12 months and a day to 36 months.

Tags:

2 Responses to “Nifty Scheme Lands Five at ClubFed”

  1. [...] tax returns to bank to obtain loans. The five owners all pled guilty to various tax charges and were sentenced last year. Full restitution is being made to the [...]

Leave a Reply