The New York State Department of Taxation and Finance today announced that a Queens pizzeria operator and several corporations he’s involved with have agreed to pay the State nearly a half a million dollars related to sales tax fraud.

Syed Mehboob, 45, of 11 Andover Drive in Syosset, NY, was connected to six Papa John’s pizza franchises in Astoria, Corona, Woodside, Bayside, and Sunnyside.  He was arrested in August of last year and charged with the theft of several hundred thousand dollars in sales tax for the years 2005 through 2010.

Mehboob pled guilty to one misdemeanor charge and received a conditional discharge at his sentencing.  The six franchises he’s involved with, seen in this case as six separate defendants, also pled guilty and were fined at sentencing on April 29.

The defendants admitted that they stole $226,017 in sales tax – but with interest, penalty and fines were ordered to a make full restitution to the State of $497,021.

The case was investigated by the Tax Department’s Criminal Investigations Division and prosecuted by the office of Queens District Attorney Richard A. Brown.

“I commend District Attorney Brown and his team for working with us to prosecute those who attempt to evade taxes,” said Commissioner Thomas H. Mattox.  “This is a perfect example of a merchant flagrantly stealing the public’s money – the type of fraud that cheats honest business owners who play by the rules.”

“The sentences should send a clear message that criminal activity that cheats the government and the public out of much needed revenue will not be tolerated,” said District Attorney Brown.  “New York State depends on the collection of taxes to operate its government.”

Each year, New York State businesses collect nearly $25 billion in sales tax from their customers. Businesses transmit the funds to the Tax Department for state programs and distribution to local governments.

Taxpayers who believe a business hasn't collected the proper sales tax, or has collected it but failed to remit the funds, can report tax evasion and fraud online at the Tax Department's Web site or by calling 518-457-0578. The information is kept confidential

Recent Press Releases

• Suffolk County Business Owner to Serve 2 to 6 Years in Prison and Pay $1.4 Million for Sales Tax Fraud
• Governor Cuomo Announces State Tax Department Secures Nearly $4 Billion Over Past Year Through Aggressive Efforts to Crackdown on Tax Evasion
• Governor Cuomo Announces New Strike Force to Crack Down on Illegal Cigarette and Tobacco Trafficking and Sales