An iconic Philadelphia area burger chain and its owners are in hot water with the U.S. government for allegedly failing to report more than $15 million in sales to the Internal Revenue Service. … The defendants are accused of “constructing a long-running scheme to avoid paying millions of dollars in personal and employment taxes as related to their restaurant chain,” the U.S. Attorney’s Office said in a printed statement.
The individual defendants include Robert Mattei, 73, of Delray Beach, Fla.; Leo McGlynn, 52, of Swarthmore; Brian Welsh, 48, of Springfield, Delaware County; Joseph Donnelly, 49, of Springfield, Delaware County; and Elena Ruiz, 46, of Drexel Hill. All but Ruiz are also charged with bank fraud, while McGlynn and Donnelly are charged with aggravated structuring of financial transactions.
According to the charging document — a criminal information — the defendants have evaded taxes since the company’s 1986 founding by, among other methods, paying employees a portion of their wages with unreported cash, thereby avoiding payroll taxes; paying suppliers with unreported cash; and having false tax returns prepared that under-reported income, while falsely inflating expenses and deductions.
Between 2006 and 2010, the defendants allegedly failed deliberately to account for $15.6 million in gross receipts, thereby evading $2.2 million in federal employment and personal taxes.
If convicted, Mattei and Welsh could face up to 40 years in prison, $1.5 million in fines and full restitution; McGlynn and Donnelly could face up to 50 years in prison and $2 million in fines; and Ruiz up to 10 years in prison and $500,000 in fines.