John Drivas, a 66-year-old restaurateur from Hampton, N.H., was sentenced to one year and one day in prison for tax fraud involving federal employment taxes and state meals taxes. He was also ordered to pay restitution of $1,596,775 to the Massachusetts Department of Revenue, $439,341 to the IRS, and a $20,000 fine. The sentencing took place in federal court in Boston, according to the U.S. Attorney's Office.
In September 2024, Drivas pled guilty to five counts for failing to pay employment taxes and four counts of wire fraud for not paying state meals taxes at his three restaurants—Red’s Sandwich Shop in Salem, Red’s Kitchen and Tavern in Peabody, and Red’s Seabrook in Seabrook, N.H. From 2016 to 2022, he paid $1.5 million in under-the-table wages, causing a loss of over $439,000 in employment taxes. While he owned the Salem location alone until 2022, he co-owned the other restaurants with family members. "Federal tax law requires employers to withhold from any employee wages an amount for income taxes and other amounts for Social Security and Medicare taxes," as reported by the U.S. Attorney's Office.
Drivas collected over $1.5 million in "meals taxes" from customers in Massachusetts but failed to forward the taxes to the state as required. This included a 6.25% sales tax and a 0.75% local meals tax in Salem and Peabody. He intentionally withheld $1,596,775 and did not report it to the Massachusetts Department of Revenue. The case was handled by U.S. Attorney Joshua S. Levy, IRS Special Agent Thomas Demeo, and Katherine Mulligan from the Insurance Fraud Bureau, with assistance from the Department of Revenue's Criminal Investigations Bureau, as stated by the U.S. Attorney's Office.
