Owners of iconic Philly cheesesteak shop sentenced to prison for tax fraud

Two owners of an iconic Philly cheesesteak shop were sentenced to prison for tax fraud Thursday.

Nicholas Lucidonio, 57, and Anthony Lucidonio Sr., 84, who owned and operated Tony Luke’s, a cheesesteak restaurant in South Philadelphia, have both been sentenced to 20 months in prison for “their decade-long conspiracy to defraud the IRS,” according to a press release from the Department of Justice (DOJ).

The Lucidonios hid more than $8 million in cash receipts from the IRS from 2006 to 2016, according to the release. They did so by “among other things, depositing only a portion of the cash they received into Tony Luke’s business bank accounts and providing incomplete information to their accountant,” which resulted in their accountant filing “false tax returns that substantially underreported business receipts and income.”

“The Lucidonios also committed employment tax fraud by paying employees ‘off the books’ in cash,” the release read. “To evade detection, they paid most employees a portion of their wages ‘on the books.’”

“The Lucidonios then paid the remainder of their wages in cash without withholding federal income tax, Social Security and Medicare taxes or paying those to the IRS,” the release continued. “They did not report these cash wages to their accountant, which caused the accountant to prepare and file false quarterly employment tax returns with the IRS.”

As a dispute between the Lucidonios and somebody else began, they became worried about their tax fraud scheme coming to light, per the release. Because of their fears, they “directed that the prior year’s tax returns be amended to increase reported sales.”

The Lucidonios were also both ordered to serve three years of supervised release, according to the release. Their scheme caused a loss of more than $1.3 million to the U.S.