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Jorge Fernandes, 76, of West Orange, sold the Iberia Tavern and Iberia Peninsula to a developer for a combined $40 million and closed both restaurants in June amid what turned out to be a federal investigation.
Fernandes "was fully aware of his legal obligation to collect payroll taxes from the restaurants’ employees," U.S. Attorney for New Jersey Philip R. Sellinger said, "but instead paid a number of the employees 'off the books,' or 'under the table,' failing to collect any payroll taxes from them."
Fernandes’ conduct caused the government a total tax loss of $715,780 for tax years 2016 through 2017," the U.S. attorney said.
Rather than risk the potential consequences of a trial, Fernandes took a deal from the government, pleading guilty to two counts of failing to collect payroll taxes.
U.S. District Judge Christine P. O’Hearn scheduled sentencing for Nov. 20 in federal court in Newark.
Sellinger credited special agents of the IRS - Criminal Investigation and special agents with the U.S. Department of Labor's Office of the Inspector General for the investigation leading to the guilty plea, secured by Assistant U.S. Attorney Shawn Barnes, Chief of the OCDETF/Narcotics Unit in Newark.
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