Owner Of Tony Luke's In South Philadelphia, Son Indicted On Tax Fraud Charges
PHILADELPHIA (CBS) -- The owner of a popular Philadelphia cheesesteak shop and his son have been federally indicted on tax fraud charges. Owner of Tony Luke's, 82-year-old Anthony Lucidonio Sr., his son 54-year-old Nicholas Lucidonio, and another unnamed individual were named in an indictment Friday morning that alleges they were involved in a tax fraud scheme from 2006 to 2016.
According to federal officials, the father and son concealed more than $8 million from the IRS in cash receipts, deposited only a portion of business receipts into the business bank accounts, and provided incomplete information concerning receipts and income to their accountant.
The indictment says they also filed fraudulent corporate and individual tax returns that greatly understate business receipts and income.
"Tony Luke's is an iconic Philadelphia brand, but that is not what matters in the eyes of the law," U.S. Attorney William McSwain said. "These are serious allegations and it should go without saying that everyone has an obligation to follow the law."
The Lucidonio's were also allegedly paying employees "off the books" or in cash to avoid payroll taxes. To avoid getting caught, they would pay most of their employees a portion of their pay "on the books" based on the number of hours they worked. They would pay employees the rest of their paycheck in cash.
Authorities say that when a dispute over franchising rights arose between the two defendants and another individual in 2015, the Lucidonios were afraid their tax fraud scheme would be revealed.
They then allegedly amended the prior year's tax returns to be amended to increase the reported sales. But, when amending their returns officials say they substantially offset the increase in reported sales and the additional taxes that would be due by claiming additional false and fraudulent expenses -- and continuing the tax fraud scheme.
The indictment only names the location at 39 E. Oregon Avenue.
The Tony Luke's locations at Lincoln Financial Field, Citizens Bank Park, and Philadelphia International Airport are not named in the indictment. Those locations are all owned by Anthony Lucidonio Jr.
The defendants are charged with conspiring to defraud the United States, 19 counts of aiding and assisting in the filing of false personal and corporate tax returns, and four counts of tax evasion.
If convicted, they can face a maximum sentence of five years in prison for the conspiracy charge and each count of tax evasion, and three years in prison for each false return charge.
They also face a maximum period of five years of supervised release, a $6,000,000 fine, and a $2,400 special assessment.
The law firms representing the defendants, Fox Rothschild LLP and Weir & Partners LLP, issued a joint statement that said their clients will dispute the criminal charges filed against them. "Tony and Nicky have fully cooperated with the government's investigation since its outset," the law firms said. "The Original Tony Luke's will continue to serve its faithful clientele and provide gainful employment to its employees and their families."
