Security News: Rome Donut Shop Owners Sentenced to Prison for Tax Evasion

SYRACUSE, NEW YORK – A Rome, New York couple and their adult son were sentenced today in federal court in Utica for tax evasion and conspiracy to defraud the United States, announced United States Attorney Carla B. Freedman, Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, and Thomas Fattorusso, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division, New York Field Office.

In November 2021, John Zourdos, age 69, his wife, Helen Zourdos, age 65, and their son, Dimitrios Zourdos, age 39, were each convicted of conspiracy to defraud the United States, tax evasion, and helping to file false corporate tax returns. U.S. District Court Judge David N. Hurd sentenced John Zourdos to 30 months’ imprisonment; Helen Zourdos to 20 months’ imprisonment; and Dimitrios Zourdos to 10 months’ imprisonment.  Judge Hurd also ordered the defendants to pay $2,000,769 in restitution to the United States and to serve 3 years of supervised release after they complete their terms of incarceration.

According to evidence presented at trial and other court documents, John, Helen, and Dimitrios Zourdos operated three Dippin Donuts coffee and donut shops with locations in Rome and New Hartford. From 2012 to 2017, the trio concealed from the IRS approximately $4.5 million in cash sales. During that period, they evaded more than $2 million in individual and corporate taxes, by, among other things, depositing cash directly into their personal bank accounts instead of into business bank accounts, providing incomplete information to their accountants, causing their accountants to file false individual and corporate tax returns with the IRS, and funding personal expenditures directly with undeposited and unreported cash. They used unreported income to fund a lavish lifestyle that included multiple luxury vehicles, expensive watches, investment accounts, and real estate. They also paid some of their employees “off the books” cash wages to avoid federal payroll taxes.

This case was investigated by the IRS Criminal Investigation Division. It was prosecuted by Assistant Chief John N. Kane of the Justice Department’s Tax Division and Assistant United States Attorney Michael F. Perry.