Father, son who run Tony Luke's in South Philadelphia sentenced on tax fraud charges
PHILADELPHIA (CBS) -- The father and son who run Tony Luke's in South Philadelphia were sentenced to nearly two years in prison for tax fraud charges, the United States Department of Justice said on Thursday.
Nicholas Lucidonio, 57, and Anthony Lucidonio Sr., 84, were sentenced to 20 months in prison each after a decade-long conspiracy from 2006 to 2016 showed they hid more than $8 million in cash receipts and other things, the DOJ said. The father and son pleaded guilty to the case in 2022 and own the shop located on Oregon Avenue.
The Lucidonios hid the $8 million by only depositing a portion of the cash into the cheesesteak restaurant's business bank accounts. This caused their accountant to file tax returns that "substantially underreported business receipts and income."
The Lucidonios also paid employees under the table and committed employee tax fraud. The father and son paid most employees a portion of their income "off the books" in cash.
The cheesesteak shop tried to avoid getting caught by paying employees some of their wages "on the books," and the Lucidonios then paid the rest of their wages in cash, which didn't account for any withholding from federal income tax, Social Security and Medicare taxes or paying those to the IRS.
The Lucidonios didn't report the cash wages to their accountant, which again led to them filing false quarterly employment tax returns with the IRS.
During a 2015 franchising rights dispute with Tony Luke Jr., the brother and son of Nicholas and Anthony Lucidonio, the two worried their tax fraud scheme would be revealed. As a result, Nicholas and Anthony Lucidonio made changes to the prior year's tax returns to increase reported sales.
Luke Jr., the face of Tony Luke's, was not named in the indictment. He split from his father and brother in 2015 followed by a public court battle over franchising agreements and recipe ownership. Luke Jr. owns other Tony Luke's restaurants in multiple states.
The DOJ claims the Lucidonios lost the United States $1.3 million.
The father and son were ordered to three years of supervised released after finishing their sentences.
