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Well-known Philadelphia restaurant owners jailed in $8 million tax fraud scheme

There’s nothing like a cheesesteak in Philadelphia, but the owners of a popular shop are now famous for something other than food.

Nicholas Lucidonio, 57, and Anthony Lucidonio Sr., 84, the owners of Tony Luke’s, a beloved cheesesteak chain in business since 1992, were each sentenced to 20 months in prison and three years of supervised release for a “decade-long conspiracy to defraud the IRS,” according to a government press release.

There are currently 17 restaurants operating under the Tony Luke brand and franchise name. The original is located at Front Street and Oregon Avenue in South Philadelphia.

Court documents say the Lucidonios hid more than $8 million in cash receipts between 2006 and 2016 and purposely withheld them, which led to their accountant filing falsified tax returns without his knowledge.

Related: IRS uses AI to fight tax evasion and tax-dodging millionaires

The father-and-son duo were also accused of failing to document some employee payments and paying workers partially in cash but continuing to pay most of their payroll earnings. Additionally, these cash payments were not reported to their accountant, which led to falsified and incorrect employee tax return forms.

“For a decade, these successful restaurateurs courageously manipulated the books, deceiving both the government and honest taxpayers,” said U.S. Attorney Jacqueline Romero, for local point of sale, NBC 10. “As these investigations and prosecutions demonstrate, tax fraud is a fairly high-stakes crime, for which violators bear full responsibility.”

The tax fraud scheme was originally discovered in 2015.

“When a dispute over Tony Luke’s franchise rights arose between the Lucidonios and another individual in 2015, the Lucidonios became concerned that their tax fraud scheme would be revealed, so they ordered that the prior year’s tax returns be redacted to increase reported sales,” the US Department of Justice explained in a statement. “The Lucidonios continued to hide their ongoing payroll tax scheme.”

The project cost the US government approximately $1,321,042.

Related: Father-son duo to serve sentence for $20 million lottery scheme

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