Crime & Safety

Nifty Fifty's Co-Owner Sentenced in Tax Evasion Scheme

Four others who pleaded guilty to charges in the case will be sentenced this week.

A co-owner of a 50s-style diner–which had a Bensalem location until recently–has been sentenced to 15 months in prison for his alleged involvement in a tax evasion conspiracy.

Robert Mattei, 75, of Del Ray Beach, Fla., a co-owner of the Nifty Fifty's restaurant chain, was sentenced Monday for his role in a scheme that cheated the Internal Revenue Service by failing to properly account for more than $15 million in gross receipts. 

Mattei pleaded guilty in May of 2012 to conspiracy, tax evasion, and bank fraud. 

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Mattei, along with co-defendants Leo McGlynn, Brian Welsh, Joseph Donnelly, and Elena Ruiz, all of whom also pleaded guilty, constructed a long-running scheme to avoid paying millions of dollars in personal and employment taxes as related to their restaurant chain, the U.S. Department of Justice for the Eastern District of Pennsylvania alleged. 

The owners not only evaded paying taxes they owed, they filed income tax returns claiming they were due refunds based on the erroneous reporting of their incomes, authorities said. 

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The restaurant owners evaded paying taxes since the restaurant was established in 1986 by, among other things, paying employees a portion of their wages with unreported cash in order to evade payroll taxes; paying suppliers with unreported cash; and having false tax returns prepared that under-reported income and falsely inflated expenses and deductions, according to authorities. 

Between the years 2006 and 2010, the defendants did not properly account for $15.6 million in gross receipts, thereby evading $2.2 million in federal employment and personal taxes, authorities said. In the conspiracy, Mattei, McGlynn, Donnelly, and Welsh committed bank fraud by submitting to the bank bogus income tax returns to secure several business loans, authorities alleged. 

The Bensalem location, which was destroyed by fire in July, hit the real estate market in September with a $2 million asking price. 

In addition to the prison term, U.S. District Court Judge Mary McLaughlin ordered restitution. To date, the IRS has received $4,336,871 in tax payments and an additional $205,300 in forfeiture payments. 

McGlynn will be sentenced Tuesday; Donnelly will be sentenced Wednesday; and Ruiz and Welsh will be sentenced Thursday. 

This case was investigated by the Internal Revenue Service Criminal Investigation Division and the FBI. It is being prosecuted by Assistant United States Attorneys Nancy E. Potts and Paul G. Shapiro. 


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