Owner of Mystic Pizza Owes Feds $234K in Taxes: Officials

The owner of Mystic Pizza, the restaurant made famous by a 1988 movie of the same name, has pleaded guilty in federal court after skirting income taxes and funneling hundreds of thousands of dollars into his family's bank accounts, according to federal prosecutors.

The U.S. attorney's office said restaurant owner John Zelepos, 48, of North Stonington, diverted more than $330,000 into his personal bank account, two of his wife's checking accounts and his three children's savings accounts between 2006 and 2010.

He also made 61 similar transactions totaling $522,658 between January 2010 and January 2011, according to the U.S. attorney's office.

Federal prosecutors said Zelepos made all deposits in amounts less than $10,000 to prevent the bank from filing currency transaction reports. In 2006, he declared only $388,957 in taxable income when in reality he had earned $551,858.

As part of a plea deal, Zelepos admitted to carrying out similar schemes between 2007 and 2010, costing the federal government a total of $234,407 in tax revenue, according to the U.S. attorney's office. He has agreed to pay it back as restitution, along with interest and penalties.

Zelepos will also turn over the $522,658 he allegedly diverted into his personal accounts.

He'll be sentenced June 23. Zelepos could face up to 15 years in prison and a fine of $500,000.

It's not the first time Zelepos has been in trouble with the law. Last September, the Department of Labor accused him of depriving his employees more than $105,000 in wages.

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