The co-owner of Nick’s Famous Roast Beef in Beverly, and his wife and son, were sentenced in federal court in Boston Wednesday for failing to report nearly $6 million in income and avoiding paying $1 million in taxes, according to the US Attorney’s office.
Nicholas Koudanis, 67, of Topsfield was sentenced to two years in prison, plus two years of supervised release, and ordered to pay restitution of $2,042,366 to the Internal Revenue Service, prosecutors said in a statement.
The restitution amount includes approximately $992,821 in taxes owed, plus interest and penalties, the statement said.
His wife, Eleni Koudanis, 61, was sentenced to one year of probation and was ordered to pay the same amount of restitution as her husband, the statement said.
Their son, Steven Koudanis, 40, was sentenced to one year of probation to be served in home confinement and was ordered to pay a restitution amount of $151,240 to the IRS, according to prosecutors.
The family, along with another relative and co-owner, Nicholas Markos of Lynn, were charged with tax fraud in December 2015, after an investigation found they had under-reported the restaurant’s income by $6 million over a six year period, from 2008 to 2013, according to prosecutors.
During that period, Nicholas Koudanis and Markos skimmed more than $1 million in cash receipts each year, and did not report the income on corporate or personal tax returns, the statement said.
“Each week, Koudanis and Markos personally divided the cash receipts, determining how much to deposit in the business’s bank account and report on their tax returns, how much to use to pay suppliers and employees, and how much to keep for themselves,” prosecutors said.
Steven Koudanis created false cash register receipts that were used during an IRS tax audit of the business. Each week, they would divide the cash receipts and determine how much to deposit in the bank, how much to report on their tax returns, and how much to keep for themselves, prosecutors said.
By 2014, Nicholas and Eleni Koudanis had accumulated more than $1.6 million in cash that they kept in a safe in their home, the statement said.
In January, Nicholas Koudanis pleaded guilty to one count of conspiracy to defraud the United States by obstructing the IRS and 10 counts of aiding and assisting in the filing of false tax returns, according to prosecutors.
Eleni Koudanis was responsible for the restaurant’s bookkeeping functions and provided false income information to the tax preparer. She pleaded guilty to five counts of filing false tax returns.
Steven Koudanis pleaded guilty to one count of endeavoring to obstruct and impede a tax audit.
Markos pleaded guilty to the same charges as Nicholas Koudanis and is scheduled to be sentenced on May 9.Jacob Geanous can be reached at firstname.lastname@example.org. Follow him on Twitter @jacob_geanous.