A Manhattan restauranteur from Long Island admitted to a near million dollar tax evasion scheme.
New Hyde Park resident Adel Kellel, 62, the former owners of Raffles Bistro in New York City, pleaded guilty in Manhattan federal court to a $771,195 scheme, U.S. Attorney Geoffrey Berman announced.
Berman said that as of 2011, Kellel was the president and a 45 percent owner of K&H Restaurant, which operated Raffles Bistro in a Manhattan hotel, taking over as 100 percent owner between 2012 and 2015.
While he was the owner, Kellel admitted to concealing and did not report a substantial portion of the restaurant's gross receipts.
As part of the scheme, Kellel deposited cash income received from Raffles’ customers into personal bank accounts or spent it directly on personal expenses, without disclosing it to his accountants or paying taxes on it.
Kellel also diverted more than 150 checks from the hotel, totaling more than $2 million in gross receipts by depositing the checks into a dozen bank accounts that Kellel did not disclose to his accountants.
According to Berman, Kellel used the diverted income to live a lavish live that included overseas transfers; condominium fees; rent for a high-end Manhattan apartment; college tuition payments from his children; shopping at luxury retailers, such as Hugo Boss and Saks Fifth Avenue; payments for luxury cars manufactured by Mercedes, Porsche, and Maserati; and payments for domestic and international travel.
“As he admitted in court, restaurateur Adel Kellel cooked his books for years, skimming money from his restaurant and salting it away in personal accounts or using it for personal expenses,” Berman said. “His scheme was a recipe for making millions in unreported income, but now he will have to pay for his gluttony.”
Kellel pleaded guilty to one count of tax evasion. When he is sentenced on Thursday, April 23, Kellel will face up to five years in prison. In addition to his sentence, Kellel was also ordered to pay $771,195 in restitution to the IRS and New York State Department of Taxation and Finance.
“The defendant funded his lavish lifestyle by failing to pay legally obligated taxes thus causing harm to all Americans,” Principal Deputy Assistant Attorney General Richard E. Zuckerman said. “We remain committed to prosecuting tax criminals who refuse to pay their fair share.”
IRS-CI Chief Jonathan D. Larsen said: “When Mr. Kellel chose to hide millions of dollars from the IRS, he unfairly shifted the tax burden to honest American taxpayers. As we start the tax filing season, this is a stark reminder of the serious consequences of tax evasion, including potential imprisonment. IRS-CI will continue to be relentless in our mission to root out tax fraud.”
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