Restaurant Owner Convicted of Tax Fraud, Misusing Funds for Gambling

According to a press release from the US Department of Justice, a federal jury has convicted R. B. of Cincinnati for failing to pay taxes he withheld from his employees’ wages at three fried chicken restaurants that were under his ownership and operation.

The conviction followed a relatively brief five-day trial that took place in the Southern District of Ohio and was presided over by US District Judge Douglas R. Cole. 

The trial revealed the 65-year-old man’s continuous tax evasion crimes over the past few years.

Tax Evasion Going Back Years Ago 

R. B. has been responsible for operating S-Corporation Richie’s Fast Food Restaurants Inc. since 1991, when one of his duties became to withhold Social Security, Medicare, and income taxes from the wages of his employees. 

However, as per the evidence presented in court, R. B. only got half the job done. Namely, while he did withhold the taxes between 2017 and 2018 for his 22 to 34 employees, he did not pay the withheld amounts to the Internal Revenue Service (IRS).

Apparently, according to the results of the investigation led by IRS Criminal Investigation, his tax evasion scheme extended back to earlier years, during which the IRS had already assessed penalties for failing to remit taxes. 

Instead of settling these tax obligations, the man decided to divert the funds from his businesses for personal use, which also included fueling his passion for gambling.

Up to 40 Years in Prison

The jury found R. B. guilty of eight counts of failing to pay taxes for four financial quarters in both 2017 and 2018. 

Each count carries a maximum sentence of five years in prison, totaling up to 40 years. 

While his sentencing date has yet to be determined, it has been announced that a federal district court judge will establish the duration of the sentence based on US Sentencing Guidelines along with other statutory factors.

The prosecution was handled by Trial Attorney Alexandra K. Fleszar of the Justice Department’s Tax Division and Assistant US Attorney Ebunoluwa Taiwo representing the Southern District of Ohio.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and US Attorney Kenneth Parker for the Southern District of Ohio were the ones who announced the conviction.

A week ago, we reported that a senior finance manager was facing a similarly serious sentence for stealing over £930,000 ($1,2 billion) of taxpayers’ money to gamble. 

Previous to that, an Ohio man who pleaded guilty to tax evasion, money laundering and operating illegal gambling businesses earlier in the year was sentenced to seven years in prison.