Papa John's franchise owner charged in sales tax theft

Ajay Choudhary, 38, of Levittown, the owner of Ajay Choudhary, 38, of Levittown, the owner of a group of Papa John's pizza franchises in Nassau County, was charged with stealing more than $800,000 in sales tax revenue over a seven-year period, county prosecutors said. (March 12, 2013) Photo Credit: NCDA

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The owner of a group of Papa John's pizza franchises in Nassau County pleaded not guilty Tuesday to charges that he kept more than $800,000 in state sales taxes his restaurants collected from customers.

Ajay Choudhary, 38, of Levittown, "kept sales tax revenue instead of remitting it to the state" from May 31, 2005, until Aug. 31, 2012, the Nassau district attorney's office said in a statement.

"Mr. Choudhary made a victim out of every New Yorker when he stole taxpayer money that is earmarked to fund the operation of our state and its essential programs," District Attorney Kathleen Rice said.

Choudhary's lawyer, Robert Kelly of Manhattan, said Tuesday the charges are improper. "My client denies that he owes $800,000. There appear to have been some accounting errors on the part of the state."

District attorney investigators arrested Choudhary earlier Tuesday. He is charged with second-degree grand larceny, three counts of second-degree criminal tax fraud and 19 counts of first-degree offering a false instrument for filing. He is due back in court Friday.

Nassau District Court Judge David McAndrews ordered Choudhary held on $100,000 cash or bond. He could face up to 15 years in prison.

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Choudhary owns Papa John's in Freeport, Inwood, Uniondale, Valley Stream and Hicksville, and formerly owned one in Farmingdale, prosecutors said.

Choudhary's arrest was the result of a joint investigation involving the district attorney's office, Papa John's International Inc., and the state Department of Taxation and Finance, prosecutors said. A spokesman for Papa John's did not respond Tuesday to a request for comment.

"We are ensuring a level playing field for the vast majority of businesses that comply with their tax responsibilities," state Commissioner of Taxation and Finance Thomas Mattox said in the district attorney's statement.

In the statement, Rice said Choudhary "collected sales tax from customers but failed to remit more than $800,000 of that tax revenue to the state, as well as falsified quarterly tax returns in which he underreported sales at his restaurants."

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