Hampton man who owned restaurants in NH, Mass., pleads guilty to tax fraud charges
Sep. 10—A Hampton man who owned three restaurants in New Hampshire and Massachusetts has pleaded guilty to failing to pay nearly $2 million in employment and state and local meals taxes over a six-year time frame, the U.S. Attorney's Office in Massachusetts announced this week.
John Drivas, 66, who owned and operated three restaurants — in Seabrook, Salem, Mass. and Peabody, Mass. — pleaded guilty in federal court to five counts of failure to collect and pay employment taxes owed to the IRS and four counts of wire fraud for state meals taxes he collected from restaurant customers but failed to pay to the state Department of Revenue. U.S. District Judge Julia E. Kobick has scheduled sentencing for Dec. 5.
Federal prosecutors say between January 2016 to October 2022, Drivas was the owner and operator of three restaurants: Red's Sandwich Shop in Salem, Mass., Red's Kitchen and Tavern in Peabody, Mass. and Red's Seabrook in Seabrook, N.H.
Drivas was the lone shareholder of the Salem restaurant until he sold it to an employee in September 2022, court documents show, and owned 100% of the Peabody restaurant with his wife and was a 52% owner of the Seabrook restaurant with his children.
According to court documents, Drivas paid wages to several restaurant employees in both payroll checks and cash, and he did not report the cash wages to the IRS or pay employment taxes on them, causing employment tax losses of $439,341, the U.S. Attorney's Office said.
Drivas also collected more than $1.5 million in state meals taxes paid by restaurant customers, which he failed to pay over to the state as required by law, prosecutors claim.
In Massachusetts, all owners and operators of restaurants and bars are required to collect 6.25% sales taxes on meals. Salem and Peabody also require restaurants and bars to collect an additional 0.75% local option meals excise tax.
Although Drivas collected the taxes from restaurant customers, "he intentionally withheld $1,596,775 of those taxes from monthly reports and payments" owed to the Massachusetts Department of Revenue, according to a statement from the Department of Justice.
The charge of failure to pay taxes carries a maximum potential sentence of five years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss and restitution.
Each wire fraud charge is punishable by up to 20 years in prison, supervised release for three years, a fine of $250,000 or twice the gross gain or loss, and restitution.
Sentences are imposed by the federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
