Ciaran Dillon, who works for Claddagh Irish Pubs, has been charged with forging documents to avoid paying $1 million in sales tax to eight US states.
Dillon, of Solon, Ohio, reportedly withholds about a month’s worth of sales tax each year from the chain of Irish pubs that operated in the Midwest for nearly a decade.
According to court records, Dillon was charged in federal court in Cleveland on Wednesday with two counts of wire fraud and then arrested in the Orlando, Fla., area, court records show.
Reports in US media indicate that an arraignment date has not yet been set and the case is assigned to US District Judge Christopher Boyko.
Dillon is named chief financial officer of CDG Acquisition LLC, which, along with the pubs, was an American investment by Supermac owner McDonagh.
Mr McDonagh previously told the Business Post in 2021 that Irish pubs in Claddagh were his “biggest mistake” and cost him millions in lost business. He also told the newspaper he was selling pubs and restaurants.
A Supermac spokesman told The Sunday World: ‘This is not Supermac related and Supermac is not involved in the proceedings.
“Claddagh Irish Pubs reported financial irregularities in the United States and knew that a number of Claddagh Irish Pubs employees in the United States had been questioned at the time.
“As an investigation is ongoing, it would be inappropriate to comment further.”
Based in Ohio, Ciaran Dillon is originally from Ireland and previously reportedly worked as a financial controller for Supermac’s.
Dillon is accused of running the program from January 2010 to May 2018 for 15 restaurants in Ohio, Indiana, Kentucky, Illinois, Michigan, Minnesota, Pennsylvania and Wisconsin, according to the indictment. of accusation.
A statement from the U.S. Attorney’s Office in the Northern District of Ohio reads: “The indictment states that, based on the defendant’s instructions, the accountant would alter the figures for sales tax and sale of the business, file false tax returns and pay the amount indicated by the defendant.
“It is alleged that a common way of underpaying sales tax was for the company to file and pay sales tax for four weeks over a five-week period, which resulted in CDG collecting a week of sales taxes that have been omitted from state sales tax returns. .
“In total, it is alleged that during this period, Defendant defrauded the States of Indiana, Kentucky, Illinois, Michigan, Minnesota, Ohio, Pennsylvania and Wisconsin out of over $1 million in sales tax revenue collected from CDG customers at fifteen restaurants. .
“An indictment is only an accusation and is not proof of guilt. The accused is entitled to a fair trial in which the onus will be on the government to prove his guilt beyond a reasonable doubt. »
Several Irish pubs in Claddagh have closed in recent years, including one in Legacy Village in Lyndhurst and one in Crocker Park in Westlake.
Local news website Cleveland.com refers to it as the latest in a series of legal disputes over Irish pubs in Claddagh, with the chain suffering financial losses in the mid-2000s and becoming embroiled in a major lawsuit.
The dispute was between Mr McDonagh and Kevin Blair, then managing director of Claddagh, a former operations manager at Supermac’s main office in Galway.
The pair have been squabbling over $21m (€15m) which Mr McDonagh gave Claddagh. He claimed it was a loan, but Mr Blair said it was an investment.
Mr McDonagh won the legal battle when a Cincinnati court ordered Claddagh to repay him the $21 million.
The court also ordered Mr Blair to pay Mr McDonagh $2 million in damages, which Blair is said to have appealed.
Claddagh Irish Pubs went bankrupt in 2007.
Ciaran Dillon was Supermac’s financial controller at the time, according to the Irish Times.
McDonagh and Supermac’s then bought the pub chain in bankruptcy proceedings in 2008 through its Solon-based CDG acquisitions for $10 million, court records show.
In September 2007, Ciarán Dillon, as Supermac’s financial controller, reportedly said Claddagh’s affairs were still the subject of ongoing litigation, but discussions were still ongoing about buying Claddagh from a court-appointed trustee. “It’s still on the cards but I’m not going to talk about Claddagh today,” he said.
Mr Dillon said the Irish business performed well in 2006, with turnover up to €27.31 million from €24.76 million in 2005.
“It was an exceptional year and indeed 2007 continues to hold the same line. We are up 10%,” he said.
Mr Dillon said the turnover of all restaurants in the chain would reach almost 100 million euros a year.
In March 2008, Independent.ie reported that McDonagh had successfully acquired the US-based Claddagh Irish Pub restaurant chain for over $10 million (6.3 million), despite objections from a number of creditors who owed money to the company.