Two Cortland restaurant owners face felony charges, accused of failing to report more than $5 million in sales — and failing pay more than $380,000 in sales tax between 2011 and 2015 from three restaurant companies they own individually and jointly, according to Cortland City Court documents.
George Seibel, 60, owner of Dark Horse Tavern, and Anthony Caruso, 60, who owns Hairy Tony’s — together they own the A Pizza and More chain — were each charged by the state Attorney General’s office Nov. 18 in connection with three incidents.
They were arraigned in Cortland City Court and remain free without bail pending an appearance Dec. 20 in city court.
David Burch of Syracuse, the defendants’ attorney, could not be reached for comment.
However, Seibel and Caruso issued a statement this morning: “This is from an older time frame and we’ve been dealing with the state over the tax discrepancy, which is paid in full, and we hope to move forward.”
In the first case, dating to March 2011, Caruso was charged with one count of second-degree grand larceny, one count of third-degree criminal tax fraud and six counts of first-degree filing a false instrument, court information shows.
Between March 1, 2011, and May 31, 2015, Caruso, owner of Hairy Tony’s at 104 Main St., underreported his total taxable sales by $1.6 million and failed to remit $131,024.98 in sales tax to the state Department of Taxation and Finance, court documents show, when the business should have paid nearly $285,000.
Hairy Tony’s had a point-of-sale system that could print a daily report that calculates collected tax sales, but Caruso did not provide that information to his accountant, John Reagan, court documents state.
Caruso did not “utilize any register reports, Z tapes, or credit card receipts when determining the business’s sales totals although he was aware these documents would provide accurate figures,” the felony complaint states.
Also, Caruso did not provide Reagan with accurate business records or other supporting documents for quarterly sales tax returns, the court document said.
“He (Caruso) ‘came up’ with a number in his head based upon the deposits in the business bank accounts which he used as the business’s total quarterly sales,” the complaint states.
When Criminal Investigations Division Tax Auditor Nicole Napoli asked Caruso why he didn’t use at least credit card receipts to establish his sales, Caruso replied: “I just didn’t.”
A Pizza and More
In the second case, which dates to December 2011, Caruso and Seibel were both charged with one count of second-degree grand larceny, two counts of third-degree criminal tax fraud and six counts of first-degree filing a false instrument, felonies, according to court documents.
Between Dec. 1, 2011, and May 31, 2015, Caruso and Seibel, co-owners of APAM LLC., which owns the A Pizza and More restaurant chain, underreported total taxable sales by $1.9 million and failed to pay $158,653.28 in sales tax, court documents said, when the partnership should have paid nearly $306,000.
The felony complaint states that like the first case, the owners did not review register tapes or sales records, nor did they supply accountant Reagan with reports, Z-tapes or credit card receipts.
Dark Horse Tavern
In the third case, dating to March 2012, Seibel was charged with one count of second-degree grand larceny, two counts of third-degree criminal tax fraud and eight counts of first-degree filing a false instrument, court documents show. Between March 1, 2012, and Dec. 17, 2015, Seibel underreported about $1.1 million in taxable sales and failed to pay $90,895.47 in sales tax for Academy Avenue Enterprises, which owns Dark Horse Tavern, at 96 Main St., Cortland, a felony complaint states, when it should have paid nearly $213,000 in sales tax.
Reagan, like the other cases, got no other information on sales figures than what was provided to him by Seibel, or the Dark Horse’s bookkeeper, the complaint states.