September 17, 2002

PRESS RELEASE

DUNKIN' DONUTS OWNER SENTENCED FOR TAX FRAUD

Boston, MA... A Middleboro, Massachusetts man, the owner of numerous Dunkin' Donuts franchises, was sentenced today in federal court on tax charges.

United States Attorney Michael J. Sullivan and Joseph A. Galasso, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation, announced today that
JOSE SARDINHA, age 43, of Middleboro, Massachusetts, was sentenced by U.S. District Judge Patti B. Saris to 4 months' imprisonment, to be followed by 1 year of supervised release, the first 4 months of which to be served in home confinement under electronic monitoring, and a $10,000 fine. SARDINHA pleaded guilty on June 6, 2002, to a three count information charging him with filing false federal income tax returns.

At the earlier plea hearing, the prosecutor told the Court that had the case proceeded to trial the Government's evidence would have proven that SARDINHA owned four Dunkin' Donuts shops located in Lakeville, Hanover, and Middleboro. In 1994 and 1995, SARDINHA participated in a kickback and false invoicing scheme with West Lynn Creamery ("WLC") in which he was able to choose among inflated prices that he wanted to pay to WLC for cream and other dairy products. WLC then "rebated" the difference between the inflated invoice price and the real price of goods back to SARDINHA in the form of rebate checks made payable to his franchises. SARDINHA diverted more than $126,000 in rebate monies, converted them to personal use, and failed to report the monies as income to the IRS.

The case was investigated by Special Agents of the U.S. Internal Revenue Service, Criminal Investigation. The was prosecuted by Assistant U.S. Attorney Diane Freniere in Sullivan's Economic Crimes Unit.

Press Contact: Samantha Martin, (617) 748-3139