Nifty Fifty's Accountant Pleads Guilty To Tax Fraud Scheme
William J. Frio, 58, of Springfield Township, pleaded guilty today to his role in a tax evasion scheme involving the Nifty Fifty’s restaurant chain. Frio pleaded guilty to conspiracy to commit tax evasion. Frio is the sixth defendant to plead guilty in the long-running scheme to avoid paying millions of dollars in personal and employment taxes, by failing to properly account for more than $15 million in gross receipts, thereby evading federal taxes of over $2.28 million. Frio also pleaded guilty to filing his own false tax returns, aggravated structuring of financial transactions, and loan fraud. U.S. District Court Judge Mary McLaughlin scheduled a sentencing hearing for April 29, 2015.
Frio, an accountant and income tax preparer who provided services to the Nifty Fifty’s organization since 1986, conspired with the owners and principals of Nifty Fifty’s. The defendants skimmed cash to pay themselves, their employees, 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.
In 2008, Frio submitted a false loan application to Sovereign Bank for a $417,000 mortgage for his personal residence. Frio 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. The 2006 and 2007 tax returns that he had actually submitted to the IRS showed far less income than the false returns supplied to Sovereign Bank, and Frio had not been employed by Tanfasia, Inc. in 2006 or 2007.
Frio also used his position as the Nifty Fifty’s accountant to embezzle over $4 million of funds that belonged to the organization. As part of that scheme, between 2006 and 2009, Frio knowingly structured cash transactions totaling over $2.6 million out of Nifty Fifty’s accounts at Sovereign Bank.
Frio faces a maximum possible sentence of 57 years in prison, full restitution to the IRS, a fine of up to $2.75 million, and criminal forfeiture.
The case was investigated by the Internal Revenue Service Criminal Investigations and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Paul G. Shapiro and Nancy E. Potts.