New York Bookkeeper Admits Assisting Restaurant Owner Evade Federal Taxes
John H. Durham, United States Attorney for the District of Connecticut, and Kristina O’Connell, Special Agent in Charge of IRS Criminal Investigation in New England, announced that IDALECIA LOPES SANTOS, 59, of Queens Village, New York, waived her right to be indicted and pleaded guilty today before U.S. District Judge Victor A. Bolden in Bridgeport to one count of tax evasion.
According to court documents and statements made in court, Santos worked as an outside bookkeeper for Bruno DeFabio, an owner of several pizza restaurants in Connecticut and New York, including Pinocchio Pizza LLC, doing business as Pinocchio Pizza in New Canaan, Connecticut; Top Oven Restaurant Corp., doing business as Pinocchio Pizza in Wilton, Connecticut; DiFabio Brothers Pizza Corp., doing business as Amore Pizza in Scarsdale, New York; Odell Pizza, Inc., doing business as Amore Cucina and Bar in Stamford, Connecticut; Nepperhan Restaurants Group, Inc., doing business as ReNapoli Pizza, in Old Greenwich, Connecticut, and Homefield Restaurant Corp., doing business as Pinocchio Pizza in Pound Ridge, New York. During the times at issue, Santos was employed by two different New York-based accounting firms.
As a bookkeeper, Santos worked directly with DiFabio and his employees to determine relevant revenue, payroll and other operating figures for DiFabio’s businesses, and to assist in the preparation of corporate tax returns for the businesses, quarterly tax reporting regarding employee payroll, and the personal income tax returns for the owners.
In pleading guilty, Santos admitted that she and others at the accounting firms knew that DiFabio and his businesses engaged in a practice whereby cash was removed from the cash registers and not deposited into the restaurants’ operating bank accounts. Despite this knowledge, the accounting firms used the bank records to determine gross receipts of the businesses, and the cash that was removed from the registers was not reported to the IRS. This resulted in the understatement of income and taxes owed on DiFabio’s personal income tax returns.
Santos and others at her accounting firms, who assisted in the preparation of work papers and other documents used for tax return preparation, were also aware that DiFabio and his businesses used cash removed from the registers to pay certain wages for DiFabio and employees without reporting those amounts to the IRS. Certain employees had their entire wages paid “off the books,” while a portion of other employees’ wages was not reported. This resulted in the manipulation of net income reported to the IRS and the underpayment of withholding taxes to the IRS.
The charge of tax evasion carries a maximum term of imprisonment of five years. A sentencing date is not scheduled. Santos is released pending sentencing.
On October 25, 2018, DiFabio pleaded guilty to one count of conspiracy to file false income tax returns and payroll tax returns. When he pleaded guilty, he agreed that the loss to the IRS in income taxes and employment taxes for the 2013 through 2015 tax years was $816,954. DiFabio awaits sentencing.
On September 24, 2018, DiFabio’s business partner in some of his restaurants, Steven Cioffi, pleaded guilty to one count of aiding and assisting in the filing of a false tax return. He also awaits sentencing.
This investigation is being conducted by the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.