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Justice News

Department of Justice
U.S. Attorney’s Office
District of Connecticut

Friday, March 16, 2018

Owner of Old Saybrook Pizza Restaurant Sentenced to Prison for Filing False Tax Returns

John H. Durham, United States Attorney for the District of Connecticut, announced that ROBERT KEHAYIAS, 58, of Old Saybrook, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to three months of imprisonment, followed by one year of supervised release, for filing false tax returns.

According to court documents and statements made in court, KEHAYIAS owns and operates Pizza Works (also known as Pizza Junction, LLC), a restaurant located in Old Saybrook.  For the 2010 though 2014 tax years, KEHAYIAS deposited most of the cash receipts generated by the restaurant into his personal money market account, a portion of the cash receipts into other personal bank accounts, and only a minimal amount of cash into the business bank account.  During this time, KEHAYIAS provided his tax return preparer with Quickbooks reports that significantly understated the gross receipts of the business each year.  As a result, KEHAYIAS failed to report more $765,733 in taxable income on his federal income tax returns for the 2010 through 2014 tax years, and failed to pay approximately $343,000 in taxes.

On September 29, 2017, KEHAYIAS pleaded guilty to one count of filing a false tax return.

KEHAYIAS has paid all of his back taxes.  He still owes approximately $361,000 interest and penalties.  Judge Arterton ordered KEHAYIAS to make a $200,000 payment to the IRS within two weeks.

This case was investigated by the Internal Revenue Service – Criminal Investigation Division, and was prosecuted by Assistant U.S. Attorney Douglas P. Morabito.

Updated March 16, 2018