The owner of two recently shuttered prominent restaurants in Newark’s Ironbound District has admitted to paying employees off the books and avoiding more than $715,000 in payroll taxes, according to federal authorities.

Jorge Fernandes, 76 – who was 50% owner of Iberia Tavern and Iberia Peninsula – pleaded guilty before U.S. District Judge Christine O’Hearn to two counts of failing to collect payroll taxes for the tax period of 2016 through 2017, U.S. Attorney Philip Sellinger announced in a July 20 press release.

While Fernandes was “fully aware of his legal obligation to collect payroll taxes from the restaurants’ employees,” he instead paid a number of staffers under the table, ultimately avoiding $715,780 in payroll taxes, according to documents related to the case.

The charges to which Fernandes pleaded guilty each carry a maximum penalty of five years in prison and a $10,000 fine. He’s scheduled for sentencing in November, Sellinger said.

Thomas Calcagni, an attorney representing Fernandes, said in a statement, “Jorge has dedicated the vast majority of his life to serving and caring for the Ironbound community. He and the Iberia restaurants have been pillars of the neighborhood, though not without mistakes. In line with the honorable way in which he has lived his life, Jorge has acknowledged those mistakes.”

After serving the community for nearly half a century, the iconic Portuguese restaurants closed last month and the properties were sold to a developer for $40 million, according to TapInto Newark. 

Fernandes and his business partner pointed to inflation and staffing shortages as the biggest factors for their retirement and sale of the restaurants, the outlet also reported. 

NJ.com noted that the restaurants’ other owner was not charged in the tax evasion case.

See also:

• Union County restaurant owner admits to underreporting almost $500K in sales tax