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Proprietors of Philadelphia cheesesteak chain sentenced to prison in $8M tax fraud scheme

By Mandy Donalds
January 29, 2024

The owners of Philadelphia's famous Tony Luke's restaurant enterprise have been sentenced in an $8 million tax fraud scheme.

The shocking revelation of fraud has hit the heart of Philadelphia's culinary scene.

Nicholas Lucidonio, 57, and Anthony Lucidonio Sr., 84, the owners of the renowned Tony Luke's Cheesesteak restaurants, have been sentenced to prison for concealing over $8 million from tax authorities over a decade, as FOX Business reported.

The downfall of a culinary icon

Tony Luke’s, a beloved cheesesteak and sandwich shop with its origins in South Philadelphia, has long been a staple in the local community.

However, beneath the surface of this popular eatery chain, a decade-long scheme was unfolding.

From 2006 to 2016, the Lucidonios cleverly hid over $8 million in cash receipts from the Internal Revenue Service (IRS).

This involved only depositing part of their cash earnings into business accounts, misleading their accountant, and subsequently filing inaccurate tax returns.

A tangled web of deceit and fraud

The Department of Justice (DOJ) revealed that the Lucidonios also engaged in employment tax fraud.

The owners paid their employees partly "on the books" and partly in cash. This method allowed them to avoid taxes on cash wages, including federal income tax, Social Security, and Medicare taxes.

The fraudulent activities were not reported to their accountant. As a result, false quarterly employment tax returns were filed with the IRS.

Franchising dispute exposes the fraud

The Lucidonios' fraudulent practices came to light in 2015 during a dispute over Tony Luke's franchising rights.

Fearing exposure, they attempted to cover their tracks by amending previous years' tax returns to show higher reported sales.

Despite these efforts, the brothers continued their payroll tax scheme. This resulted in a significant loss of $1,321,042 to the IRS, a serious offense for any business entity.

Sentencing and the future of Tony Luke’s

The sentencing of the Lucidonios marks a significant moment in the history of Tony Luke's.

Both Nicholas and Anthony Lucidonio Sr. will serve 20 months in prison, followed by three years of supervised release.

The impact of this case extends beyond the legal consequences.

It raises questions about ethical business practices and the responsibilities of business owners to their employees and the government.

Community reaction and implications

The news of the sentencing has resonated deeply within the Philadelphia community.

Tony Luke's, a symbol of the city's rich culinary culture, is now at the center of a significant legal scandal.

This case serves as a stark reminder of the consequences of tax evasion and fraud. It highlights the importance of transparency and honesty in business operations, particularly in the hospitality industry.


  • The sentencing of Nicholas and Anthony Lucidonio Sr. for a $8 million tax fraud represents a pivotal moment in Philadelphia's culinary history.
  • Over a decade, the Lucidonios concealed over $8 million in cash receipts from the IRS, employing tactics such as partial cash deposits and misleading their accountant.
  • In addition to hiding cash earnings, the owners committed employment tax fraud by paying employees both on and off the books, avoiding federal taxes.
  • The fraud was discovered in 2015 during a franchising rights dispute, prompting the Lucidonios to amend past tax returns to show higher sales.
  • Despite these amendments, their payroll tax evasion continued, resulting in a loss of over $1.3 million to the IRS.
  • Both owners received a sentence of 20 months in prison and three years of supervised release, raising questions about business ethics and responsibilities.