The United States Department of Justice has announced that a court has sentenced the father-son duo who run Tony Luke’s in South Philadelphia. According to the DOJ’s announcement, the court sentenced the owners of the famous Philadelphia cheesesteak restaurant to 20 months in prison.
Also, the judge sentenced them to three years of supervised release. The sentence stems from a tax fraud case, which alleged the defendants concealed over $8 million for over a decade. The court found the owners, Nicholas Lucidonio, 57, and Anthony Lucidonio Sr., 84, guilty of a decade-long conspiracy.
The Lucidonios owned and operated Tony Luke’s, a famous cheesesteak and sandwich shop in South Philadelphia. According to court documents, the two men hid cash receipts from the Internal Revenue Service (IRS). Also, they only deposited a portion of the cash they received into restaurant business accounts.
As a result, the DOJ said they provided the company’s accountant with incomplete information. Hence, the accountant filed false tax returns. In addition, the DOJ said the court convicted the father-son duo of employment tax fraud.
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The Lucidonios allegedly paid employees under the table. The father-son duo paid most employees a portion of their income “off the books” in cash. However, the restaurant owners tried to avoid getting caught by paying employees some of their wages “on the books.”
Then, the Lucidonios paid the rest of their wages in cash, without federal income tax, Social Security, and Medicare taxes or paying those to the IRS. In addition, the DOJ claims they did not report the cash wages to their accountant. As a result, the accountant prepared false quarterly employment tax returns with the IRS.
“For a decade, these successful restaurateurs boldly cooked the books, cheating the government and honest taxpayers alike,” said U.S. Attorney Jacqueline Romero. “As this prosecution shows, tax fraud is a crime with some pretty high stakes, with violators held fully accountable.”
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The father-son tax fraud became public in 2015 during a franchising rights dispute with Tony Luke Jr., Nicholas’s brother and son of Anthony Lucidonio. During the franchise dispute, Nicholas and Anthony worried Luke Jr. would reveal their tax fraud scheme.
Hence, Nicholas and Anthony changed the prior year’s tax returns to increase reported sales. However, Luke Jr.’s name did not appear in the indictment. He reportedly split from the franchise in 2015. Afterward, the Lucidonios engaged in a public court battle over franchising agreements and recipe ownership.
Still, the two men continued hiding their payroll tax scheme, which resulted in a loss of $1,321,042 to the U.S. The father and son pleaded guilty to the case in 2022 amid investigations. According to reports, the Tony Luke’s franchise has 17 restaurants operating under it. However, the original restaurant sits at Front Street and Oregon Avenue in South Philadelphia.
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