Two members of the family operating the original Tony Luke’s cheesesteak shop in south Philadelphia have each been sentenced to 20 months in federal prison and three years of post-release supervision for dodging taxes by fudging the landmark’s financial records.
According to the U.S. Department of Justice, Tony Luke’s founder Tony Lucidonio, age 84, and son Nicky Lucidonio, 57, underreported sales and what they owed in federal payroll taxes from 2006 to 2016. Officials say the pair deposited only a portion of revenues in the restaurant’s bank account and then reported that figure to their accountant for tax-reporting purposes.
Through that and other means, father and son hid $8 million of revenues from the Internal Revenue Service.
In addition, Justice said, the Lucidonios paid employees a portion of their wages off the books and reported only the recorded portion of the pay to the accountant, who unknowingly used those figures to compute the establishment’s payroll-tax obligation. No taxes were taken out of employees’ unreported payments in cash.
All told, the duo cheated the federal government out of more than $1.3 million in taxes.
According to the Justice Department, the Lucidonios might have hid more of their restaurant’s revenues if a dispute over franchising rights hadn’t erupted in 2015 between the family and an unidentified outsider. Tony and Nicky Lucidonio feared that the scope of their tax-dodging efforts would be discovered, so they revised their 2015 tax returns to show more revenue than what was originally reported to the IRS, the department said.
The pair continued to misrepresent their payroll expenses, Justice added.
Founded in 1992, Tony Luke’s is one of Philadelphia’s most celebrated Philly cheesesteak outlets, along with landmarks like Pat’s King of Steaks, Geno’s and John’s Roast Pork. The cheesesteak—a sandwich of thinly sliced beef topped with cheese, onions and peppers—is a signature of Philadelphia, and rough-and-tumble south Philly in particular.
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