United States Department of Justice
Michael J. Sullivan
District of Massachusetts
United States Attorney's Office
John Joseph Moakley U.S. Courthouse
1 Courthouse Way, Suite 9200
Boston, MA 02210
Press Office: (617) 748-3139
November 10, 2005
DUNKIN' DONUT OWNER SENTENCED IN CONSPIRACY TO DEFRAUD IRS
Boston, MA... A Canton, Massachusetts man was sentenced in federal court Wednesday, November 9, 2005, for his part in a conspiracy to defraud the Internal Revenue Service.
United States Attorney Michael J. Sullivan and Rebecca A. Sparkman, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation, announced that THEODORE FOUNDAS, age 53, of Canton, Massachusetts, was sentenced by U.S. District Judge George A. O'Toole, Jr. to a 3 year term of probation and fined $15,000. FOUNDAS pleaded guilty on May 20, 2002, to conspiring to defraud the Internal Revenue Service.
At a previous hearing, the prosecutors told the Court that, had the case proceeded to trial, the evidence would have proven that FOUNDAS, along with co-defendants Debra Foundas and Paul Govostes, owned nine Dunkin' Donut shops in the Greater Boston area. From 1994 to 1997, the defendants participated in a false invoicing scheme with West Lynn Creamery ("WLC") in which they were able to choose among inflated prices they 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 the defendants either through rebate checks made payable to the franchises or made payable directly to the individuals. The defendants diverted approximately $668,065 in rebate monies, converted them to personal use, and failed to report the monies as income to the IRS.
Co-defendants Debra Foundas, age 47, and Paul Govostes, age 57, both of Canton, Massachusetts, pleaded guilty on May 20, 2002, to their roles in the scheme. Debra Foundas was sentenced on December 10, 2002, to 3 years of probation and a $25,000 fine. Paul Govostes was sentenced on July 20, 2005, to 2 years of probation and a $10,000 fine.
The case was investigated by Special Agents of the U.S. Internal Revenue Service, Criminal Investigation. The case was prosecuted by Assistant U.S. Attorneys John M. Hodgens, Jr., Stephen P. Heymann, and Peter A. Mullin in Sullivan's Criminal Division.
Press Contact: Samantha Martin, (617) 748-3139
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