nifty fifty's accountant indicted on tax charges
William J. Frio, 58, of Folsom, PA, is charged by indictment, unsealed today, in a tax evasion scheme involving the Nifty Fifty’s restaurant chain, announced United States Attorney Zane David Memeger. Frio is charged with conspiracy to commit tax evasion by operating the Nifty Fifty’s long-running scheme to avoid paying millions of dollars in personal and employment taxes. The scheme defrauded the Internal Revenue Service by failing to properly account for more than $15 million in gross receipts. Frio is also charged with filing his own false tax returns, aggravated structuring of financial transactions, and loan fraud.
Frio is an accountant and income tax preparer who has provided services to the Nifty Fifty’s organization since 1986. According to the indictment, Frio conspired and agreed with the owners and principals of Nifty Fifty’s, all of whom have been charged separately, in a scheme to use skimmed cash to pay themselves and people and businesses who supplied goods and services to the Nifty Fifty’s restaurants, providing those persons and businesses with the opportunity to evade the payment of their own taxes.
It is further alleged that, in 2008, Frio submitted a false loan application to Sovereign Bank, for a $417,000 mortgage for his personal residence. Frio allegedly submitted to the bank bogus federal income tax returns for 2006 and 2007, and bogus Forms W-2, falsely representing he had earned substantial income from Tanfasia, Inc., when, as the defendant knew, the 2006 and 2007 tax returns that he had actually submitted to the Internal Revenue Service showed far less income than the false returns supplied to Sovereign Bank, and that the defendant had not been employed by Tanfasia, Inc. in 2006 or 2007. It is further alleged that between January 2009 and November 2009, Frio knowingly structured transactions with Sovereign Bank, totaling more than $2.6 million, as part of a pattern of illegal activity involving transactions of more than $100,000 in a 12-month period. As explained in the indictment Frio used his position as the Nifty Fifty’s accountant to embezzle hundreds of thousands of dollars of funds that belonged to the organization.
If convicted, Frio faces a maximum possible sentence of 57 years in prison, full restitution to the IRS and a fine of up to $2.75 million.
The case was investigated by the Internal Revenue Service Criminal Investigation Division and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Paul G. Shapiro and Nancy E. Potts.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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