Philadelphia Pharmacy Pays $165,000 to Resolve Allegations of Failing to Maintain Proper Inventory and Documentation of its Controlled Substances
PHILADELPHIA – Elena Ruiz, 48, of Drexel Hill, PA, was sentenced today to 12 months and a day in prison and Brian Welsh, 50, of Springfield, PA, was sentenced to 20 months in prison for their roles in the tax evasion scheme carried out by the owners of the ANifty Fifty=s@ restaurant chain. Joseph Donnelly, 50, of Springfield, PA, was sentenced yesterday to 28 months in prison for his role.
Restaurant owners Robert Mattei and Leo McGlynn, along with the above defendants, constructed a long-running scheme to avoid paying millions of dollars in personal and employment taxes as related to their restaurant chain. They cheated the Internal Revenue Service by failing to properly account for more than $15 million in gross receipts. They also filed income tax returns claiming they were due refunds based on the erroneous reporting of their incomes.
Mattei, was sentenced Monday to 15 months in prison. McGlynn was sentenced Tuesday to 36 months in prison. All five defendants pleaded guilty to the charges. The restaurant owners paid employees a portion of their wages with unreported cash in order to evade payroll taxes; paid suppliers with unreported cash; and had false tax returns prepared that under-reported income and falsely inflated expenses and deductions. Just between the years 2006 and 2010, the defendants deliberately failed to properly account for $15.6 million in gross receipts, thereby evading $2.2 million in federal employment and personal taxes. In the course of their conspiracy, Mattei, McGlynn, Donnelly, and Welsh committed bank fraud by submitting to the bank bogus income tax returns in order to secure several business loans.
In addition to the prison term, U.S. District Court Judge Mary McLaughlin ordered the defendants to pay restitution to the IRS. To date, the IRS has received $4,336,871 in tax payments and an additional $205,300 in forfeiture payments.
This case was investigated by the Internal Revenue Service Criminal Investigations and the FBI. It was prosecuted by Assistant United States Attorneys Nancy E. Potts and Paul G. Shapiro.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525