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Press Release

Restaurant Owner Pleads Guilty To Tax Evasion

For Immediate Release
U.S. Attorney's Office, District of Rhode Island
Owner Of The Beach House Admits To Failing To Pay Taxes On

PROVIDENCE, R.I. – Kenneth J. O’Brien, 47, of Portsmouth, R.I., owner of K&D Investments Inc., d/b/a The Beach House, a bar, restaurant and nightclub located in Portsmouth, pleaded guilty in federal court in Providence today to three counts of tax evasion, announced United States Attorney Peter F. Neronha and William P. Offord, Special Agent in Charge of IRS Criminal Investigation.

Appearing before U.S. District Court Judge John J. McConnell, Jr., O’Brien admitted to the court that he failed to report nearly one million dollars in income from his business. O’Brien admitted that he kept two sets of business bookkeeping records, pocketed the cash and ultimately falsified his personal tax returns.

According to information presented to the court, in July 2011 an IRS review discovered that The Beach House was listed for sale, and that Kenneth O’Brien was maintaining two sets of bookkeeping records. One set was the true record of the business’s income, the second was fictitious for the purpose of third party disclosures necessary to maintain and operate the business. During a meeting with an undercover agent, O’Brien explained that he skimmed cash from the business.  The defendant told the agent, “… I steal five to ten thousand a month. On a slow month five, on a good month ten.” 

According to information presented to the court, between 2007 and 2010, O’Brien failed to disclose $929,095 in income from the business and failed to pay to the IRS $171,990 in taxes, plus any interest and penalties.

O’Brien is scheduled to be sentenced onSeptember 2, 2014. Tax evasion is punishable by a statutory penalty up to 5 years in federal prison and a fine of up to $100,000.

The case is being prosecuted by Assistant U.S. Attorney Richard W. Rose, with the assistance of Assistant U.S. Attorney Terrence P. Donnelly.


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Contact: 401-709-5357

Updated June 22, 2015