Claddagh Irish Pubs parent company’s former CFO charged with tax fraud

Ciaran Dillon, the former Chief Financial Officer (CFO) of CDG Acquisition, LLC (CDG), a company registered in the state of Ohio which owned the Claddagh Irish Pubs chain of restaurants, has been charged with defrauding multiple states of sales tax revenue where the restaurant chain operated.

Dillon, 56, of Solon, Ohio, was named in the indictment and officially charged with two counts of wire fraud, First Assistant US Attorney Michelle M. Baeppler announced on Thursday, September 1.

Former CFO of Claddagh Irish Pubs parent company charged with defrauding states out of more than $1 million in sales tax revenue. @FBICleveland https://t.co/wSBuyT7pvq


— U.S. Attorney — Northern Ohio (@NDOHnews) September 1, 2022

According to the indictment, from January 2010 through May 2018, Dillon, acting in his official capacity as CFO of CDG, directed a company accountant to pay certain states less sales tax than the true amount owed.

The indictment states that based on Dillon’s instruction, the accountant would edit the company’s sales and sales tax figures, file false tax returns, and pay states the amount instructed by Dillon.

It is alleged that one common way to underpay sales tax was for the company to report and pay sales tax for four weeks during a five-week period, leading CDG to collect a week’s worth of sales taxes that were omitted from state sales tax filings.

In total, it is alleged that during this time, Dillon defrauded the states of Indiana, Kentucky, Illinois, Michigan, Minnesota, Ohio, Pennsylvania, and Wisconsin out of more than $1 million in sales tax revenue collected from CDG customers across fifteen restaurants.

The US Attorney’s Office Northern District of Ohio notes that an indictment is only a charge and is not evidence of guilt. The case was investigated by the Cleveland FBI and is being prosecuted by Assistant US Attorney Alejandro A. Abreu. 

According to court documents, Dillon was arrested in the Orlando, Florida area on Wednesday, August 31, and released on certain conditions, including having to surrender his passport.

An arraignment date has not yet been set, Cleveland.com reported on Wednesday.

The Claddagh Irish Pub chain was founded in the US in 2001 by Cleveland native Kevin Blair, who was a former operations manager at Supermac’s main office in Co Galway, Ireland. Supermac’s, the Irish fast-food chain, was founded by Galway man Pat McDonagh, who later helped bankroll the Claddagh Irish Pub chain.

However, McDonagh and Blair found themselves in a legal dispute, with McDonagh arguing that his $21 million was a loan and not an investment. McDonagh won the lawsuit, and Claddagh Irish Pubs ended up in bankruptcy in 2007.

As part of the bankruptcy proceedings, McDonagh and Supermac’s bought the pub chain through its Solon-based CDG Acquisitions for $10 million, Cleveland.com reports. At the time, Dillon was Supermac’s financial controller.

McDonagh has acknowledged that the Claddagh Irish Pubs venture was his biggest “blunder.” 

“I probably took my eye off the ball and didn’t realize fully what was happening,” McDonagh told the Irish Times in 2011.

Later, in January 2021, McDonagh told the Sunday Business Post that his deals to sell off the remainder of the Claddagh Irish Pub chain locations in the US were scuppered by the pandemic.

He said at the time that it remained his intention to sell the pubs in the long term, but that it would depend on the state of play in the US. “At the best of times, it’s not easy running a business from 3,000 or 4,000 miles away,” he said.




Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: