Famed Philly Eatery Controversy: Why are owners sentenced to prison?

Famed Philly Eatery Controversy: Tony Luke’s, a popular restaurant in Philadelphia, is a source of controversy. Visit Philadelphia, a local travel website, states that Tony Luke’s most popular topic is often “the age-old dilemma: the Cheesesteak or the Roast Pork Italian.” However, co-owners Nicholas and Anthony Lucidonio Sr. (also known as “Tony Luke”), a father and son team, are now facing federal tax evasion accusations related to a ten-year scam that will send them to prison.

The two neglected to disclose to the IRS more than $8 million in cash transactions between 2006 and 2016. The U.S. Department of Justice stated that the Lucidonio family engaged in payroll tax fraud by paying a sizeable amount of their employees’ salaries in cash “off the books,” in addition to failing to deposit all of the company’s funds into the bank account.

They essentially concealed millions of dollars by failing to disclose the cash earnings to their accountant, which resulted in ten years of fraudulent tax filings that significantly underreported their income. Following their guilty pleas in 2022, the two received official sentences of 20 months in prison each and three years of supervised release. IRS Criminal Investigation was tipped off to the tax fraud plan early on, but it needed some assistance in order to fully uncover the scam.

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Famed Philly Eatery Controversy

Nicholas’s brother Tony Luke Jr. is not a part of the tax fraud plan; he is Anthony Lucidonio’s kid.He owns other Tony Luke’s franchise sites, but he and the implicated couple parted ways years ago after a contentious court dispute about franchising rights and recipe ownership. After being let go from the Original Tony Luke’s in 2015, Tony Luke Jr. sued his father and brother, effectively growing the company into a franchise network with other locations owned by Tony Luke Jr. and Nicholas and Anthony Lucidonio. The IRS became aware of the unlawful activities as the case progressed, according to local news source The Philly Voice.

Though it was obviously a severe family feud, the brothers’ relationship appears to be at least somewhat intact. Tony Luke Jr. renamed the Original Tony Luke’s restaurant in 2022 after the Lucidonios entered a guilty plea in order to protect his brand from negative exposure. Notably, Tony’s and Nick’s Steaks was the new moniker he adopted. The menu and ownership didn’t change.

From its founding in 1992 as a South Philadelphia staple, Tony Luke’s has grown to become a multi-location, global institution. In addition to the Horseshoe Casino, The Pentagon building has a Tony Luke’s sandwich counter.