Mystic Pizza owner John Zelepos is in trouble for tax evasion and is facing a year in prison. Yes, this is the Colorado restaurant used in the 1988 film starring Julia Roberts, Matt Damon, and Vincent D’Onofrio.
John Zelepos had allegedly concealed hundreds of thousands of dollars in income in order to grab more for himself and his family. Known as a popular tourist attraction for those who had seen the film of three teenage girls and their coming-of-age tale, John had allegedly felt his restaurant could afford to cheat the IRS.
According to Fox News, Zelepos diverted over $330,000 from the restaurant’s profits into the bank accounts of his family members and those of his own. Then he allegedly filed false tax returns to hide what he was doing.
Though Gordon Ramsay had never gotten involved, this became a real kitchen nightmare for Mystic Pizza owner John Zelepos. It is unknown if the restaurant had any internal issues with food, service, management, or cleanliness, which are what the celebrity Michelin Star chef is known for fixing.
John had allegedly tried to cheat the IRS, and it didn’t work.
Forbes states that Zelepos had made 61 transactions between $3,000 to just under $10,000 in the span of 2010 and January of 2011. Since the banks report currency transactions of $10,000 or more, he had allegedly kept the transactions small enough to hide.
In 2014, it was made obvious that the extra money was not going into paying the employees of Mystic Pizza. Some worked for less than minimum wage, and there was no overtime paid, resulting in Zelepos being ordered to pay out $105,000 for wages due.
Prosecutors had even noticed some “no-show” employees on the restaurant’s records, which the Mystic Pizza owner allegedly created just to hide where the money was going.
— Accounting Today (@AccountingToday) August 26, 2015
The IRS had started catching on to what Zelepos was doing and seized over $60,000 from a payroll account at Chelsea Groton Bank in 2012.
In March, John Zelepos pleaded guilty to tax evasion and financial structuring offenses and has been sentenced to one year in prison, followed by three years of supervised release. It is unknown what the fate of the restaurant will be, but it’s likely that whoever takes it over, including Zelepos, will be watched a lot more closely.
The fame from a 1988 film starring Julia Roberts might still be enough to generate success, but John Zelepos, Mystic Pizza’s owner, won’t be using it to cheat the IRS anymore.
[Image via Mystic Pizza Official Website]