Nifty Fifty's accountant sentenced for part in tax-evasion scheme

AS IF THE thought of paying $1.7 million in restitution to the IRS weren't enough of a shock, a Delaware County man sentenced yesterday lost his footing and hit his head on the defense table in federal court.

William Frio, 59, of Springfield Township, was sentenced to five years in prison for his part in a money-skimming and tax-evasion scheme as the accountant for the Nifty Fifty's restaurant chain.

Despite the brief commotion, Frio's attorney Michael Engle reported that his client was checked out by a medic from the Marshals' Office, but did not lose consciousness or go to the hospital.

Frio pleaded guilty in January to conspiracy, loan fraud, aggravated structuring and four counts of false returns.

"Tax prosecutions are rare and tax cheats really do eat at the fabric of our society," Assistant U.S. Attorney Nancy E. Potts said in her closing.

Drawing on an investigation by IRS special agents, the prosecution argued that Frio embezzled $3.8 million from restaurant accounts and illegally structured his check cashing to avoid the bank's mandatory reporting of transactions over $10,000.

The indictment also claimed that he filed a phony bank-loan application for a personal mortgage, filed false tax returns and failed to properly account for $15.6 million in gross receipts for Nifty Fifty's in collusion with the co-owners and managers.

The restitution owed in the case is based on Frio's unreported, embezzled income on top of additional unreported income from his personal accounting business.

Fighting back tears, Frio addressed the court and apologized for his actions.

"I was on a downward spiral," he said of the time following a botched medical procedure.

Engle said that Frio suffered from a gambling addiction that contributed heavily to his motive for embezzling the money. He said Frio has since sought treatment for his addiction.

"I've seen a change in him and the way he sees things," Engle said in his closing.

"We were happy that the court saw fit to go well below the court sentencing guidelines," Engle said of the 60-month sentence. Guidelines called for between 87 and 108 months in prison.

Assistant U.S. Attorney Paul Shapiro said: "The decision [the judge] made reflected all the relevant factors of the case and was certainly appropriate."

U.S. District Judge Mary McLaughlin said she considered character witness testimony and the more than 100 letters sent on Frio's behalf, many from former mentees he coached in high school basketball.

In November 2013, Nifty Fifty's co-owners and three managers of the chain in a separate suit were sentenced to prison-time ranging from 12 to 36 months, according to court documents.