Pizzeria owner from LI to fork over nearly $500G in sales tax fraud, state says

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A pizzeria owner from Syosset and his franchises have agreed to pay the state almost $500,000 after pleading guilty to sales tax fraud, state taxation officials announced Friday.

Syed Mehboob, 45, owned six Papa John's franchises in Queens, and from 2005 to 2010, his franchises underreported income by $4 million, cheating the state of $226,017 in taxes, authorities have said.

His franchise corporations, also defendants in the case, were sentenced Tuesday, with four pleading guilty to one count of fourth-degree grand larceny, a felony; one pleading guilty to second-degree offering a false instrument for filing, a misdemeanor; and the last pleading guilty to misdemeanor petty larceny, said Cary Ziter, a spokesman for the state Taxation and Finance Department.

Mehboob pleaded guilty in December to a misdemeanor, second-degree offering a false instrument for filing, and was sentenced the same day. He and his corporations have agreed to pay the state $497,021, in taxes, interest on them and penalties, officials said.

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Mehboob, of 11 Andover Dr., had been arrested in August and charged with second-degree grand larceny, first-degree offering a false instrument for filing, second-degree criminal possession of stolen property, filing false tax returns and falsifying business records. His pizzerias were in Astoria, Corona, Woodside, Bayside and Sunnyside, state officials said.

The case was investigated by the tax department and prosecuted by Queens District Attorney Richard A. Brown.

"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," tax Commissioner Thomas H. Mattox said in a news release.

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