Crime & Safety

Three More Nifty Fifty's Owners Sentenced in Tax Evasion Scheme

In all five co-owners of the Nifty Fifty's restaurant chain have been sentenced to prison time for their roles in a $15 million tax evasion scheme.

By Theresa Katalinas

The last three of five co-owners of the Nifty Fifty's restaurant chain–which had a Bensalem location until recently–have been sentenced in a $15 million tax evasion conspiracy.

Elena Ruiz, 48, of Drexel Hill, was sentenced on Thursday to 12 months and a day in prison and Brian Welsh, 50, of Springfield, was sentenced Thursday to 20 months in prison for their roles in the tax evasion scheme carried out by the owners of the Nifty Fifty's restaurant chain.  

Joseph Donnelly, 50, of Springfield, was sentenced on Wednesday to 28 months in prison. 

Restaurant owners Robert Mattei and Leo McGlynn, along with Ruiz, Welsh and Donnelly constructed a long-running scheme to avoid paying millions of dollars in personal and employment taxes as related to their restaurant chain, prosecutors had charged. 

They cheated the Internal Revenue Service by failing to properly account for more than $15 million in gross receipts, according to the U.S. Department of Justice for the Eastern District of Pennsylvania. They also filed income tax returns claiming they were due refunds based on the erroneous reporting of their incomes, the department said.

Mattei was sentenced Monday to 15 months in prison. McGlynn was sentenced Tuesday to 36 months in prison. All five co-owners pleaded guilty to the charges. 

The restaurant owners had been accused of paying employees a portion of their wages with unreported cash to evade payroll taxes; paying suppliers with unreported cash; and having false tax returns prepared that under-reported income and falsely inflated expenses and deductions. Between 2006 and 2010, the defendants deliberately did not account for $15.6 million in gross receipts, thereby evading $2.2 million in federal employment and personal taxes, prosecutors had said. 

Mattei, McGlynn, Donnelly, and Welsh had submitted bogus income tax returns to the bank in order to secure several business loans, prosecutors had said. In addition to the prison term, U.S. District Court Judge Mary McLaughlin ordered the co-owners to pay restitution to the IRS.  

To date, the IRS has received $4,336,900 in tax payments and an additional $205,300 in forfeiture payments.  

This case was investigated by the Internal Revenue Service Criminal Investigations and the FBI.  It was prosecuted by Assistant United States Attorneys Nancy E. Potts and Paul G. Shapiro.


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