Celebrity chef violates “clean hands” rule
by AccountingWEB on
Roberto Donna is a celebrity chef in the Washington, D.C. area, having won a James Beard Award in 1996 for his legendary restaurant, Galileo.
In 2006, he closed it down and opened a more casual kind of eatery. Now, he’s looking to reopen Galileo in a new location, and he has the fan following he needs to pull it off. Unfortunately for Donna, authorities are telling him, "Not so fast." What’s the problem? He can’t pass the clean-hands test.
Here’s what happened
Donna successfully ran Galileo for 22 years. Then, in 2006 he announced he was closing Galileo to open an informal eatery known as Bebo Trattoria in Crystal City, Virginia. Every month for the next 30 months, Donna reported the meal tax he owed by filing returns with the county commissioner of revenue. But there was one problem.
County Treasurer Frank O’Leary said, “Mr. Donna faithfully filed, but he never bothered to give us any money.”
In late 2008, Donna announced he wanted to reopen Galileo – or more specifically, Galileo III. A few months later, he closed Bebo’s without ever having paid over the meal tax he collected from customers. Currently he owes $140,000 in unpaid meal tax and, with added interest and penalties, the total is $156,330.96.
How he skated by for 30 months
It wasn’t that nobody tried to hold Donna’s feet to the fire, said O’Leary.
“When we went after him to collect, we found it extremely difficult because he was very crafty,” O’Leary said. “He rented all the equipment in his restaurant, so we couldn’t go and seize equipment. He didn’t have a readily identifiable bank account in Virginia, so we couldn’t seize his bank account. He didn’t own a car. At one point, we found that he was essentially paying the waiters by just taking money out of the register at the end of the evening and giving it to them.”
O’Leary also tried friendly persuasion. Each time, he said, he’d sit down and have a nice talk with Donna. The conversations seemed fruitful but, in the end, Donna did not pay. Finally, O’Leary says he got tired of the game.
“OK,” he told reporters. “No more nice guy.” Once the decision was made to go after Donna, O’Leary was met with opposition from above him.
“Our first problem was actually convincing the prosecutor that this was something they should be doing,” O’Leary said. “At first they were somewhat skeptical, but we put together the evidence in a very convincing manner. It got pretty clear when month after month Roberto is signing off [on meals-tax reports], admitting that he owes us the money.”
After presenting evidence – including Donna’s 30 months of filed and signed meal tax returns – to the Office of the Commonwealth’s Attorney Theo Stamos, the jig was up. In early June Donna appeared before Arlington County Circuit Court Judge Benjamin N.A. Kendrick to plead guilty to one count of felony embezzlement. Judge Kendrick sentenced him to a five-year prison sentence. That sentence was then suspended on condition of probation, good behavior, and restitution.
“Part of the problem is that there’s a tendency to sort of say, ‘Oh, well, what’s the big deal here?’ Well, the big deal here is he’s stealing our money,” O’Leary told reporters. “Some kid walks into the 7-Eleven and knocks it over and gets 10 years in the slammer. Roberto steals money from us month after month after month and it didn’t look like anything bad was going to happen. Well, guess what? Now, Roberto knows better.”
Donna’s attorney, Danny C. Onorato of the Washington-based firm Schertler & Onorato – told The Detroit News that his client is trying to work out a payment plan with the county.
“He has every intention to pay the county back as quickly as possible,” Onorato said.
As for the future of Galileo III, Donna is still working out that plan. There was speculation that the restaurant would open in July of this year. But he has to pay his tax bill first. According to the District of Columbia’s city tax laws, anyone applying for any permit of license has to be able to show they do not owe the city more than $100 for any reason, including traffic tickets. Restaurant consultant Joe Spinelli told reporters that this is called the clean-hands law.
Spinelli also said Donna could probably get around that by not having his name on any permit or license application. He could not be a partner, only an employee, explained Spinelli, but in reality, “The only name they need is his on the door.”
Donna has no visible means of paying the money he owes other than teaching cooking classes from his home for $160 per person. Meanwhile, his fans eagerly await Galileo III.
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