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Tony Luke's owners sentenced in tax fraud scheme
Two owners of Tony Luke’s Philadelphia Cheesesteak restaurant have been sentenced in a tax fraud scheme after officials say they concealed more than $8 million for over a decade.
WASHINGTON - Two owners of popular Tony Luke’s Philadelphia Cheesesteak restaurant have been sentenced for tax fraud after officials say they concealed more than $8 million for over a decade.
The U.S. Department of Justice announced the owners of the popular South Philadelphia cheesesteak restaurant were sentenced Thursday for their decade-long conspiracy to defraud the IRS.
Nicholas Lucidonio, 57, and Anthony Lucidonio Sr., 84,were sentenced to 20 months in prison each.
According to court documents and statements, the Lucidonios owned and operated the cheesesteak and sandwich restaurant located in South Philadelphia.
From 2006 to 2016, they hid more than $8 million in cash receipts from the IRS by 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.
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The Lucidonios also reportedly committed employment tax fraud by paying employees "off the books" in cash. They would pay 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.
The two did not report the cash wages to their accountant, which caused the accountant to prepare and file false quarterly employment tax returns with the IRS.
After a dispute over Tony Luke’s franchising rights arose between the Lucidonios and another individual in 2015, the Lucidonios were concerned their tax fraud scheme would be revealed, so they directed that the prior year’s tax returns be amended to increase reported sales.
As a result of their tax fraud scheme, the defendants caused a loss of $1,321,042 to the United States.
The U.S. District Judge Gerald A. McHugh also ordered both defendants to serve an additional three years of supervised release.