Matthew Swartz Gets 15 Months for Tax Fraud

Matthew Swartz stole from his own employees for years, pocketing their hard-earned payroll taxes while pretending he’d done the right thing. The 50-year-old former restaurant owner of Fairmount, West Virginia, was sentenced to 15 months in federal prison for defrauding the U.S. Treasury of $486,000 in withheld employee taxes.

Swartz, the man behind the now-defunct Grainery Group of Philadelphia-area restaurants, admitted in court that he falsified payroll records to show taxes were taken out of workers’ checks — then kept the money for himself. The fraud spanned at least four years, including uncharged conduct from 2011 through 2013, with the formal charge stemming from his failure to pay over withheld taxes in 2014.

As the owner and payroll handler for his restaurant chain, Swartz had direct responsibility for filing and paying federal tax withholdings. Instead, he submitted false reports, lied to employees, and broke federal law. The deception unraveled when the IRS launched a criminal investigation into the Grainery Group’s financial practices.

In November 2020, Swartz pleaded guilty before U.S. District Court Judge Timothy J. Savage to one count of failing to pay over employee withholding taxes. The plea agreement laid bare his years-long scheme, confirming that he withheld the taxes but never sent them to the IRS — a betrayal of both his staff and the law.

On top of 15 months behind bars, Swartz will serve three years of supervised release and is now on the hook for $486,000 in restitution to the U.S. Department of Treasury. That sum represents the stolen wages and the government’s effort to claw back stolen trust.

The case was investigated by IRS Criminal Investigations and prosecuted by Assistant United States Attorney Richard Barrett. For Swartz, the fall from restaurateur to federal convict is complete — justice, delayed but not denied.