A clock with tax time sticky note and calculator on the desk.

There are some things that are ok to skim – like news headlines, a rock across a lake, or a layer of fat if you’re frying ground beef for tacos. It’s NOT ok to skim cash from your company’s sales receipts. In today’s tax fraud case, the owner of a North Reading, Massachusetts restaurant left the Internal Revenue Service (IRS) hungry for nearly $2 million in missing tax revenue.

The restaurant owner is the fourth family member to be convicted of business tax fraud. His father, mother and brother were previously convicted on tax fraud charges involving a different restaurant in Peabody. (It would be interesting to know if the family members ratted on today’s defendant to reduce their sentences or investigators thought that maybe the apple didn’t fall far from the tree?)

Over two tax years, mom, dad and brother skimmed about $2.8 million in cash receipts from their restaurant. (They didn’t deposit the cash into the restaurant’s bank account, nor did they inform their tax preparer about the large amount of missing revenue.) They used about $1.5 million of those cash receipts for their own personal use. The deceptive trio used the other $1.3 million to pay business expenses for suppliers and employee salaries. Consequently, they now must pay back lost tax revenue of about $549,883 and each serve three years of probation, with the first 18 months confined to Peabody. They must also pay a $150,000 fine.

It’s a given that today’s defendant was simply repeating the same scam at his restaurant, which was famous for roast beef sandwiches and pizza. The North Reading man skimmed $1.9 million in cash from his business receipts and neglected to report the money to his tax preparer. (You can see where this is going.) He briefly got away with avoiding paying $387,180 in corporate and personal taxes.

Judging by the sentences handed down to today’s defendant’s family, the North Reading man is definitely going to have to pay back taxes. The 43-year-old currently faces a sentence of up to three years in prison, one year of supervised release and a $250,000 fine, not to mention restitution to the IRS for committing tax fraud. (It would be a good idea for today’s restaurant owner to serve up what the government orders him to do very quickly, because the outcome won’t be pretty if Uncle Sam gets hangry.)

Today’s “Fraud of the Day” is based on an article, “Peabody Roast Beef Restaurant Owner Pleads Guilty to Tax Fraud,” posted on ItemLive.com on May 8, 2019.

BOSTON — The Peabody owner of Mike’s Famous Roast Beef & Pizza pleaded guilty late Tuesday in U.S. District Court to tax fraud by failing to report nearly $2 million in revenues.   

Emanuel “Mike” Panousos, 43, was charged with two counts of filing false corporate tax returns.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.