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Indiana restaurant owners sentenced for underreporting $1.8M in sales

June 19, 2017

Two central Indiana restaurant owners have been sentenced to home detention and ordered to make restitution for failing to collect and remit sales taxes, Marion County Prosecutor Terry Curry announced Monday.

Both owners pleaded guilty to multiple counts of theft after being charged with underreporting a total of $1.8 million in sales at six restaurants, including a Mexican eatery in Indianapolis.

Rosalio Sanchez, who pleaded to six counts of theft, was ordered to serve 545 days on home detention as part of a two-year sentence. The remaining time was suspended.

Manuel Rodriquez Alonso, who pleaded guilty to three counts of theft, received a sentence of 545 days, with one year of that time to be served on home detention. The remaining time was suspended.

Both owners are responsible for paying a total of nearly $143,000 in restitution to the Indiana Department of Revenue for underreporting revenue from 2013 to 2015.

Sanchez and Alonso operate La Cabana Mexican Grill & Bar at 7035 E. 96th St. in Indianapolis; Casa Del Sol Mexican Grill and Ciudad Colonial Fresh Mexican Food in Muncie; Casa Grande Mexican Grill & Bar in Gas City; and El Metate Mexican Grill & Bar in Fairmount. Another eatery they operated, York Pizza in Gas City, has closed.

The county prosecutor’s office and state department of revenue began investigating the business practices of the six restaurants in February 2015.

Investigators say the owners engaged in different methods to conceal and underreport cash sales. A review of one restaurant’s cash register records, for instance, revealed that the drawer was opened thousands of times in one day. However, nearly one-third of the time it was opened without a sale being recorded, the prosecutor’s office said.

The Marion County Prosecutor’s Office seized $247,411 in cash and bank accounts from the restaurants for possible forfeiture.  In addition to the $142,930 that will be paid as restitution, a separate action remains pending that seeks forfeiture of the remaining $104,480.

In announcing the sentences, Curry referred to similar charges his office filed in 2015 against three owners of the El Rodeo and El Jaripeo restaurant chain. They were convicted of underreporting $22.7 million in sales at 26 restaurants in 10 Indiana counties from 2010 to 2012.

“This is the second recent case where restaurant owners have been convicted for skimming cash sales in order to avoid their sales tax obligation,” Curry said in written comments. “Not only is this business practice unscrupulous, it is illegal and punishable.”

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