Tony Luke's founder and his sons were accused of dodging $ 8 million in taxes
Venerable South Philadelphia CheeseSteak Spot founder Tony Luke and his son were fed this week on tax fraud charges, with prosecutors saying they hid nearly $ 8 million from the IRS over a period of at least 10 years.
Prosecutors say Anthony Lucidonio Sr., 82, known as “Tony Luke Sr.”, and Nicholas Lucidonio, 54, both of New Jersey, maintained two sets of books tracking payroll and revenue records for their popular dining spot at Oregon Avenue and Front Streets, and failed to document cash transactions worth thousands of dollars.
According to indecency in US District Court in Philadelphia, Anthony Lucidonio Sr. (Tony Luke Sr.) and Nicholas Lucidonio are charged with conspiracy and aiding false employment tax returns.
To evade detection, the pair allegedly paid their employees a portion of their salaries with checks and the remainder in under the table cash payments, which they failed to report to the IRS.
Tony Luke Jr., the prominent face of the company, was not named in the indictment. He split with his father and brother in 2015 in a contentious court battle during which Lucidonio Sr., according to the indictment, became concerned their tax evasion scheme would be exposed.
The 23-count indictment alleges the business had two separate sets of records detailing the sales of the businesses at its popular store at Front Street and Oregon Avenue in South Philadelphia. One record was missing a portion of cash receipts from CheeseSteak shop that kept the pool of money away from income tax.
The brand's most prominent face, Tony Luke Jr., was not named in the indictment.
Federal prosecutors say Lucidonios gave incomplete records to an accountant who filed his tax return, and kept the entire record elsewhere. The document continued from 2006 to 2016.
But in 2015, they became worried that a franchising dispute with someone identified only as "Individual A" would lead to the tax scheme becoming public knowledge. So they asked an accountant to amend their corporate tax returns for 2013 and 2014, reporting the full sales. But on those amended returns, the Lucidonios added false expenses to receive fraudulent write-offs, the indictment says.
The father and son were also accused of payroll tax fraud. Several employees were given a paycheck that was taxed, but did not represent their full wage. The rest of the wage was paid off the books in cash.
In the indictment, Lucidonios only owned Tony Luke's South Filly location. Anthony Lucidonio Jr. (also known as Tony Luke Jr.) owns the franchise company, which has locations at Philadelphia International Airport, King of Prussia and elsewhere.
“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 in a news release. "These are serious allegations and it should go without saying that everyone has an obligation to follow the law. This alleged scheme victimized honest taxpayers in two ways: first, by hiding more than $8 million in revenue from the IRS and second, by avoiding payroll taxes.”
“And when the defendants thought their scheme might be discovered, they allegedly cooked the books even further to cover their tracks,” he added.
