Taxable Talk

Let’s say you’re involved in a 20-year scheme that has successfully evaded millions of dollars in payroll and income taxes for your largest client. However, you’ve only had minor profits from the scheme. So why not embezzle millions of dollars from that client? Given that the owners of the client are knee deep (or more) in the tax evasion scheme, they’re not likely to say anything.

Yes, this happened.

William Frio was the accountant who prepared tax returns and provided accounting services to Nifty Fifty’s, the nostalgia themed restaurant change in Philadelphia. The owners of Nifty Fifty’s along with Frio began in 1986 to underreport their income, pay employees in cash, skim cash from the business, and basically ignore the law. The scheme worked for nearly 25 years and led to the chain evading over $2.8 million in taxes.

Mr. Frio not only was actively involved in the scheme, he decided to embezzle from the chain to the tune of $4 million. He didn’t report that income on his taxes; yes, illegal income is just as taxable as legal income. To assist with his embezzlement, he structured transactions–another felony. He also lied on loan applications; that’s another felony. He pleaded guilty to all this on Monday; he’ll be sentenced later this year.

When I first reported on Mr. Frio I used one of my favorite lines from J.R.R. Tolkien’s Lord of the Rings: “Oft evil will shall evil mar.” Mr. Frio will likely have plenty of time at ClubFed to read Tolkien: He faces up to 57 years plus restitution to the IRS plus a fine of up to $2.75 million along with criminal forfeiture.

Tags: Nifty.Fiftys

This entry was posted on Tuesday, January 27th, 2015 at 7:19 pm and is filed under Tax Evasion. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.