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Case Number: 1:20-cr-00067-PGG
Judge: Paul G. Gardephe
Court: United States District Court for the Southern District of New York (New York County)
Plaintiff's Attorney: United States District Attorney’s Office, New York, New York
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Description: New York, New York taxation criminal defense lawyer represented defendant, Adel Kellel, age 63, of New Hyde Park, New York, the owner of Raffles Bistro, formerly a restaurant located in New York City, was charged with tax evasion.
“All taxpayers have an obligation to honestly report their income and pay their share of taxes,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “For those who attempt to avoid these obligations and cheat the IRS, as this sentence shows, there are serious consequences.”
“Adel Kellel cooked his books to conceal income from the IRS and his own accountants,” said Acting U.S. Attorney Audrey Strauss for the Southern District of New York. “He spent the ill-gotten gains on personal luxuries like a Mercedes, a Porsche, and a Maserati. Now he will spend two years in federal prison.”
“The accurate reporting of income is an important responsibility of all business professionals,” said IRS-Criminal Investigation Special Agent in Charge Jonathan D. Larsen. “In this case, Adel Kellel attempted to evade his taxes by diverting funds for personal use and failing to report substantial gross receipts. IRS-Criminal Investigation will continue to serve the American taxpayer by investigating individuals who hide their true income from the IRS.”
According to the allegations contained in the information to which Kellel pled guilty, documents filed in court, and statements made in court:
In 2011, Kellel was the President and a 45 percent owner of K&H Restaurant Inc. (K&H), which operated Raffles Bistro (Raffles), a coffee-shop and full service restaurant then located in a Manhattan hotel (the Hotel). From 2012 through 2015, Kellel was the 100 percent owner of K&H. From 2011 to 2015, Kellel filed false personal returns and corporate returns for K&H, and evaded his taxes by diverting and failing to report substantial gross receipts to the IRS.
For example, as part of his tax evasion scheme, Kellel diverted over 150 hotel checks, totaling over $2.1 million or approximately 43 percent of the Hotel payments K&H received by check, and then hid the gross receipts from his accountants and the IRS by depositing the checks into more than a dozen undisclosed bank accounts. These included personal accounts that Kellel held either individually or jointly with his wife, as well as accounts held in the name of K&H, some of which were opened solely to have an additional place to deposit diverted checks. Kellel also diverted substantial cash income received from Raffles’ customers, a portion of which he deposited into personal bank accounts or spent directly on personal expenses, again, without disclosing to his accountants or paying taxes.
Kellel used the diverted income for personal expenses, including overseas transfers; condominium fees; rent for a high-end Manhattan apartment; college tuition payments for his children; luxury retailers, such as Hugo Boss and Saks Fifth Avenue; Mercedes, Porsche, and Maserati vehicles; and domestic and international travel.
On Jan. 24, 2020, Kellel pled guilty to one count of tax evasion relating to the 2011 to 2015 tax years.
In total, Kellel caused a combined tax loss of at least approximately $771,195 to the IRS and the New York State Department of Taxation and Finance (NYSDTF). In addition to the sentence of imprisonment, the court ordered Kellel to pay restitution of $613,478 to the IRS and $157,717 to NYSDTF. Kellel was also ordered to serve three years of supervised release after completing his jail sentence.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Strauss praised the efforts of IRS-CI in the investigation. Trial Attorney Jorge Almonte of the Tax Division and Assistant U.S. Attorney Olga I. Zverovich are in charge of the prosecution.
26:7201.F ATTEMPT TO EVADE OR DEFEAT TAX
Outcome: Defendant was sentence to 24 months in prison.
11/30/2020 37 LETTER by USA as to Adel Kellel addressed to Judge Paul G. Gardephe from USA dated November 30, 2020 re: Special Conditions of Supervised Release and Proposed Restitution Order Document filed by USA. (Attachments: # 1 Exhibit A - Text of Proposed Restitution Order)(Zverovich, Olga) (Entered: 11/30/2020)
11/30/2020 Minute Entry for proceedings held before Judge Paul G. Gardephe:Sentencing held on 11/30/2020 for Adel Kellel (1) Count 1. Defendant A. Kellel present with attorney Richard Langone. AUSAs Jorge Almonte and Olga Zverovic