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Tony Luke's Founder, Son Plead Guilty In Tax Fraud Case

PHILADELPHIA (CBS/AP) -- The founder of a popular Philadelphia cheesesteak restaurant and one of his sons have pleaded guilty in a federal tax fraud case alleging the hiding of nearly $8 million in sales over the course of a decade. Eighty-three-year-old Anthony Lucidonio Sr. and 55-year-old Nicholas Lucidonio, two owners of the well-known cheesesteak and sandwich shop Tony Luke's, pleaded guilty Monday to conspiring to defraud the U.S. government.

The New Jersey residents acknowledged to a federal judge Monday that they paid part of their workers' salaries under the table to evade payroll taxes. They reportedly told the judge they kept two sets of books to hide cash from sales at their South Philly shop. The tax fraud scheme took place between 2006 and 2016.

Federal authorities say they intend to prove Lucidonio Sr. and Lucidonio cost the government between $550,000 and $1.5 million at their sentencing hearing. They'll be sentenced later this year.

"This tax fraud scheme victimized honest taxpayers in two ways: first, by hiding the restaurant's revenue from the IRS and second, by avoiding employee payroll taxes," U.S. Attorney Jennifer Arbittier Williams said. "Tony Luke's is an iconic brand in our region, but that is no excuse or explanation for the fraud these defendants perpetrated. We will continue to work with our law enforcement partners to investigate and prosecute these types of crimes."

The defendants said in a statement released by their attorneys that they "accept full responsibility for paying some Tony Luke's employees in cash. This practice ended in 2017, over five years ago."

The statement said the defendants "have fully cooperated with the government's investigation since it began and look forward to putting this matter behind them." Tony Luke's, they said, "will continue to serve its faithful clientele and provide gainful employment for its loyal employees and their families."

The face of Tony Luke's, Anthony Lucidonio Jr., known as Tony Luke Jr., was not named in the indictment. He split from his father and brother in 2015, followed by a public sometimes personal court battle over franchising agreements and recipe ownership.

Tony Luke's opened in 1992 and now has more than a dozen locations in Pennsylvania, New Jersey, Washington D.C., Maryland, Texas, and Bahrain.

(© Copyright 2022 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)

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