Philadelphia Cheesesteak Restaurant Owners Sentenced for Tax Fraud Scheme
By Lauren Baxter
Published January 29, 2024
The proprietors of the renowned Philadelphia Cheesesteak eatery Tony Luke’s have been convicted of tax fraud and handed prison sentences. The U.S. Department of Justice disclosed that Nicholas Lucidonio, 57, and Anthony Lucidonio Sr., 84, were each sentenced to 20 months in prison along with three years of supervised release for concealing over $8 million in cash receipts from 2006 to 2016.
Concealment of Cash Receipts and False Tax Returns
The Lucidonios, who owned and operated the popular sandwich shop, hid a substantial amount of their cash receipts from the IRS during the ten-year period. Court documents revealed that they only deposited a portion of the cash they received into the restaurant business accounts, providing incomplete information to their accountant and leading to the filing of false tax returns.
Employment Tax Fraud
In addition to concealing cash receipts, the Lucidonios were found guilty of employment tax fraud. They paid their employees 'off the books' in cash, evading federal income tax, Social Security, and Medicare taxes. The DOJ stated that the proprietors did not report the cash wages to their accountant, resulting in the preparation of false quarterly employment tax returns with the IRS.
Attempts to Conceal Fraud and Loss to the US
The tax fraud scheme came to light during a dispute over Tony Luke’s franchising rights in 2015. Fearing exposure, the Lucidonios had the prior year’s tax returns amended to show higher reported sales. However, they continued to conceal their payroll tax scheme, resulting in a substantial loss of $1,321,042 to the U.S.
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