The owners of El Rodeo and El Jaripeo restaurants took a deal in return for guilty pleas in under-reporting sales figures, Marion County Prosecutor Terry Curry announced today.
Francisco Salgado and Jose Melendez pleaded guilty to 10 counts of theft and were sentenced to serve 10 years in prison, according to the release.
Salgado and Melendez will each serve two years on home detention with the remain eight years of the sentence suspended, the release states.
Abel Bustos pleaded guilty to two counts of theft will serve one year on home detention with one year suspended.
All three defendants were ordered to serve one year of probation and ordered to pay $4.53 million in restitution according to the plea agreement.
The money comes from funds previously seized in the course of the investigation, according to the release.
Approximately $1.86 million will be paid as restitution to the Indiana Department of Revenue, and the remaining balance will go to public safety agencies in Marion and Tippecanoe counties that were involved in the investigation.
Marion County Prosecutor Terry Curry said his office is pleased with the outcome.
“The investigation uncovered a deliberate and systemic effort to under-report sales to the state and commit these crimes,” Curry said in a statement. “I hope this sends a clear message that we will investigate similar crimes and hold business owners responsible to provide a level playing field for the legitimate businesses serving our community.”
FIRST REPORT Jan. 22
Three owners of an Indiana restaurant chain have been charged with Theft and have agreed to plead guilty to charges including failure to report accurate sales figures to the state, according to Marion County Prosecutor Terry Curry and Tippecanoe County Prosecutor Pat Harrington in a release today.
The three owners, Francisco Salgado, Jose Melendez and Abel Bustos were suspected of underreporting at least $22 million in sales by the El Rodeo Mexican Restaurant and El Jaripeo Mexican Restaurant chains.
The state was tipped off after an analysis of the restaurants’ sales for 2010, 2011 and 2012 estimated that more than a quarter of the sales were not reported to the state.
The case alleged the defendants used a number of methods to conceal the incoming cash and then underreported cash sales. As an example, undecover investigators observed cash skimming at the registers of the restaurants through the use of a calculator instead of a register, making change out of an open cash drawer and failing to provide a receipt. Investigators also claimed they seized ghost books which show the willful underreporting of sales.
“This investigation started months before search warrants were executed in November, 2013. It has involved multiple agencies, and the review and audit of a massive amount of financial records. This investigation will serve as a template for future white collar and tax investigation cases,” Tippecanoe Prosecutor Pat Harrington added.
Salgado and Melendez have each agreed to plead guilty to 10 counts of Theft (D Felonies). Bustos has agreed to plead guilty to two counts of Theft (D Felonies). The defendants agreed to forfeit $4.53 million to state and local authorities, including the Indiana Department of Revenue and Marion and Tippecanoe counties under separate civil filings.
“We know that this conduct is widespread,” said Marion County Prosecutor Terry Curry. “We will continue to investigate leads regarding those businesses which fail to remit sales tax, and we will prosecute those who fail to pay their fair share,” he added. “Businesses that fail to remit the full amount of taxes due are not only neglecting their responsibility as members of their community, they are gaining unfair advantage over those businesses which play by the rules and are ultimately committing a crime.”
The forfeiture and restitution of $4.53 million will come from funds previously seized in the course of the investigation. Approximately $1.86 million will be paid as restitution to the Indiana Department of Revenue for unpaid sales tax and unpaid food and beverage tax. The remaining balance will be dispersed to various public safety agencies involved in the investigation.
Initial hearings have been set for February 2 at 9:00 a.m. in Marion County Criminal Court.