New York Donut Shop Operators Convicted of Tax Evasion | OPA

A federal jury in Utica, New York, convicted a New York couple and their son today for conspiring to defraud the United States and for tax evasion.

According to evidence presented at trial and court documents, John Zourdos, his wife Helen Zourdos, and their son Dimitrios Zourdos, all of Rome, New York, operated three Dippin Donuts stores with locations in Rome and New Hartford. From 2013 to 2017, the defendants concealed more than $2.8 million in cash sales from the IRS, and evaded more than $650,000 in individual taxes, by depositing cash directly into their personal bank accounts instead of business bank accounts, providing incomplete information to their accountant and causing their accountant to file false individual and corporate tax returns with the IRS. The defendants also used unreported cash sales to fund a lavish lifestyle that included, among other things, the purchase of multiple luxury vehicles. Evidence at trial further showed that the defendants paid some employees “off the books” cash wages for overtime hours. They paid other employees entirely “off the books” in cash for all hours worked.

John, Helen and Dimitrios Zourdos were each convicted of one count conspiracy to defraud the United States, seven counts of tax evasion, and seven counts of aiding and assisting in the filing of false corporate tax returns. Sentencing hearings for all three defendants will be scheduled at a later date. All face a maximum penalty of five years in prison on each count of conspiracy and tax evasion, and three years in prison on each count of assisting the filing of false tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Carla B. Freedman of the Northern District of New York made the announcement.

IRS-Criminal Investigation investigated the case.

Assistant Chief John N. Kane of the Tax Division and Assistant U.S. Attorney Michael F. Perry for the Northern District of New York are prosecuting the case.