Eatery chain owners to plead guilty to theft over sales
INDIANAPOLIS (AP) - The owners of a chain of Mexican restaurants in 10 Indiana counties will plead guilty to theft charges and forfeit $4.53 million for not reporting accurate sales figures to the state, prosecutors said Thursday.
The owners charged operated a chain of 26 restaurants with the names El Rodeo and El Jaripeo. Francisco Salgado of Indianapolis and Jose Melendez of Fishers each have agreed to plead guilty to 10 counts of theft, and Abel Bustos of Lafayette agreed to plead guilty to two counts of theft, the prosecutors said.
The three men are accused of not reporting an estimated $22.7 million in sales between 2010 and 2012.
"We know that this conduct is widespread. We will continue to investigate leads regarding those businesses which fail to remit sales tax, and we will prosecute those who fail to pay their fair share," Marion County prosecutor Terry Curry said at a news conference.
The investigation began months before search warrants were executed at several El Rodeo restaurants in November 2013, Tippecanoe County Prosecutor Pat Harrington said.
"It has involved multiple agencies, and the review and audit of a massive amount of financial records. This investigation will serve as a template for future white collar and tax investigation cases," Harrington said in a prepared statement.
An investigation by the prosecutors' offices and Lafayette police found the restaurants often failed to give customers a receipt, kept ghost books and skimmed cash at registers. An analysis of the restaurants' sales for 2010 through 2012 estimated that more than 25 percent of the sales were not reported to the state, the prosecutors said.
The $4.53 million forfeiture, which will come from funds previously seized by authorities, will be divided among the Indiana Department of Revenue for unpaid food and beverage tax, local counties and municipalities that are owed unpaid taxes and the agencies involved in the investigation.
Prosecutors last February filed civil forfeiture lawsuits against El Rodeo and dozens of affiliated restaurants and business entities. The lawsuit, which lists nearly 30 defendants, accused the chain of being a money-laundering operation.
Sean Hessler, one of the men's attorneys, said he expected the men to take plea agreements soon. He declined to comment further.
Initial hearings are scheduled for Feb. 2 in Marion Superior Court.