John Kalantzis, Tax Evasion, Massachusetts 2018

BOSTON – A Salem restaurant owner was sentenced to prison for failing to report nearly $1.5 million in business receipts, depriving the federal government of $383,000 in taxes.

John Kalantzis, 52, of Lynn, was sentenced by U.S. District Court Judge William G. Young to one year and one day in prison, one year of supervised release, and ordered to pay a fine of $25,000. Prior to the sentencing hearing, Kalantzis paid restitution of $383,238 to the IRS. In July 2018, Kalantzis pleaded guilty to two counts of aiding and assisting in filing a false tax return.

During tax years 2011 through 2015, Kalantzis underreported the gross receipts and expenses of King’s Roast Beef in order to improperly reduce the federal income taxes owed by the restaurant. Kalantzis did so by diverting some of the restaurant’s cash receipts to himself, paying for some of the restaurant supplies with cash, and paying a portion of his employees’ wages in cash.

Kalantzis then failed to report this conduct to his tax preparer. As such, during each of the tax years 2011 through 2015, Kalantzis failed to report cash receipts of about $300,000 and cash expenses of approximately $120,000 on King’s Roast Beef’s tax returns. As a result, Kalantzis failed to report a total of $855,000 in business income to the IRS during those years, thereby avoiding paying corporate and personal taxes of $383,000.

United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement. Assistant U.S. Attorney Mark J. Balthazard of Lelling’s Securities and Financial Fraud Unit prosecuted the case.

Kalantzis’s scheme went undetected for several years, but ultimately, his actions caught up with him. The sentence sends a strong message to business owners who think they can cheat the system and get away with it.

As the investigation and prosecution of Kalantzis’s case demonstrate, the IRS will not hesitate to take action against those who fail to report income and pay their fair share of taxes.

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