Nifty Fifty's Accountant Sentenced For Tax Fraud Scheme
PHILADELPHIA - William J. Frio, 59, of Springfield Township, PA, was sentenced today to 60 months in prison for his role in a tax evasion scheme involving the Nifty Fifty’s restaurant chain as well as evasion of his own taxes, structuring of funds he embezzled from the organization, and loan fraud. Frio, who is an accountant and income tax preparer, provided services to the Nifty Fifty’s organization dating back to 1986. He pleaded guilty on January 26, 2015, to conspiracy to commit tax evasion, four counts of filing false tax returns, loan fraud and aggravated structuring of financial transactions. In addition to the prison term, U.S. District Court Judge Mary McLaughlin ordered $1.7 million restitution, a special assessment of $700, and four years of supervised release.
Frio and five others, including the restaurant chain’s owners and managers, participated in a long-running scheme to avoid paying millions of dollars in personal and employment taxes. The scheme defrauded the Internal Revenue Service by failing to properly account for more than $15 million in gross receipts. Frio and the owners and principals of Nifty Fifty’s conspired in a scheme to use skimmed cash to pay themselves 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., when, as the defendant knew, the 2006 and 2007 tax returns that he had actually submitted to the Internal Revenue Service showed far less income than the false returns supplied to Sovereign Bank, and that the defendant had not been employed by Tanfasia, Inc. in 2006 or 2007. Between January 2009 and November 2009, Frio knowingly structured transactions with Sovereign Bank, totaling more than $2.6 million, as part of a pattern of illegal activity involving transactions of more than $100,000 in a 12-month period. Frio used his position as the Nifty Fifty’s accountant to embezzle millions of dollars that belonged to the organization.
The case was investigated by IRS-Criminal Investigation and the FBI. It was prosecuted by Assistant United States Attorneys Paul G. Shapiro and Nancy E. Potts.