Charges: Owner of Vic's Blue Dog restaurant didn't pay income taxes for 11 years

CHASKA, Minn. – A Twin Cities restaurant owner is charged with almost 20 felonies after he allegedly failed to pay millions in Minnesota state income tax for more than a decade.

The Carver County Attorney's Office says an anonymous tip was sent this summer to the Minnesota Department of Revenue, claiming 61-year-old Paul Mark Carlson – owner of Vic's Blue Dog in Victoria – was paying his workers in cash.

Investigators soon found that Carlson hadn't paid individual income taxes for 11 years, and there were no returns filed for his restaurant during that time frame. It was estimated that just between 2015 to 2020, Vic's Blue Dog took in more than $5 million in taxable sales.

Records showed that Carlson had been mailed dozens of letters by the department since 2006. In 2016 and 2018, Carlson was sent warnings stating that his continued failure to pay taxes would prevent him from renewing his liquor license. In both of those cases, Carlson settled up his debts – proving to investigators that he was actually receiving their letters.

Investigators say they met with Carlson earlier this year, and he "admitted that he knew he was required to file Minnesota Income Taxes and that he did not have a reason why he had failed to file them." He also allegedly admitted to not filing his federal taxes.

Carlson has been charged with six counts of failure to pay sales taxes, and 12 counts of failure to file state tax returns. Each count carries a penalty of five years in prison and/or $10,000 in fines.