Owners of a Famous Philly Cheesesteak Restaurant Jailed After Being Exposed in $8 Million Tax Fraud Scheme Tony Luke's has been a South Philly staple since 1992.

By Emily Rella

entrepreneur daily
Facebook via Tony Luke's
A look inside one of Tony Luke's 17 locations.

There's nothing more Philly than a cheesesteak, but the owners of one popular shop are now famous for something other than the food.

Nicholas Lucidonio, 57, and Anthony Lucidonio Sr., 84, the owners of Tony Luke's, a beloved cheesesteak chain in business since 1992, were each sentenced to 20 months in prison and three years of supervised release for a "decade-long conspiracy to defraud the IRS," according to a government press release.

There are currently 17 restaurants operating under the Tony Luke's brand and franchise name. The original is located at Front Street and Oregon Avenue in South Philadelphia.

Court documents say that the Lucidonios concealed more than $8 million in cash receipts between 2006 and 2016 and purposely withheld cash receipts, which led to their accountant filing falsified tax returns without his knowledge.

Related: IRS Uses AI to Fight Tax Evasion, Millionaires Dodging Taxes

The father and son duo were also accused of not documenting some employee payments and paying workers partially in cash but continuing to pay most of their earnings on payroll. These cash payments were also not reported to their accountant, which led to falsified and incorrect employee tax return forms.

"For a decade, these successful restaurateurs boldly cooked the books, cheating the government and honest taxpayers alike," said U.S. Attorney Jacqueline Romero, per local outlet, NBC 10. "As this investigation and prosecution show, tax fraud is a crime with some pretty high stakes, with violators held fully accountable."

The tax fraud scheme was originally uncovered in 2015.

"When a dispute over Tony Luke's franchising rights arose between the Lucidonios and another individual in 2015, the Lucidonios became concerned that their tax fraud scheme would be revealed, so they directed that the prior year's tax returns be amended to increase reported sales," the U.S. Department of Justice explained in a statement. "The Lucidonios continued to hide their ongoing payroll tax scheme."

The scheme has cost the U.S. government an estimated $1,321,042.

Related: Father-Son Duo to Serve Time for $20 Million Lottery Scheme

Emily Rella

Entrepreneur Staff

Senior News Writer

Emily Rella is a Senior News Writer at Entrepreneur.com. Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

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