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April 20, 2006

Restaurant Owner Arrested in More Than $177,000 Tax Theft Case

The owner of several South Florida restaurants has been arrested on charges that he stole more than $177,000 in sales tax he collected from customers but failed to send in to the state, the Florida Department of Revenue announced.

Paul Darrow, 50, of West Palm Beach, was arrested by the Palm Beach County Sheriffs Department on April 20 on felony charges relating to failure to file tax returns and pay tax. If convicted, he faces up to 5 years in prison and up to $5,000 in fines, as well as possible repayment of stolen tax, interest, penalty and investigative costs. Darrow also faces felony charges related to failure to file tax returns as required by law. Darrow operates restaurants called Cheeburger Cheeburger in Boca Raton, Delray Beach, and Lake Worth at: 200 S. Federal Highway in Boca Raton; 450 E. Atlantic Avenue in Delray Beach; and 819 Lake Avenue in Lake Worth, Florida, and Burgers on the Avenue, Inc. at 450 E. Atlantic Avenue in Delray Beach, also doing business as Cheeburger Cheeburger. Only Burgers on the Avenue remains open to the public.

According to Revenue Department investigators, Darrow routinely collected tax from customers at his businesses. However, during various periods between January 2003 and May 2005, Darrow failed to send in to the state all of the sales taxes that he had collected. Investigators found that Darrow had illegally kept $177,389.30 in tax money. Under state law, sales tax is the property of the state at the moment of collection. Department of Revenue staff repeatedly visited and called Darrow in an attempt to help him come into compliance with state tax law, but he failed to meet his legal obligations.

"To be fair, tax law must apply uniformly to all businesses," said Jim Zingale, executive director of the Revenue Department. "Tax cheats steal money that the public pays to support vital public services, such as law enforcement and education. They also steal a competitive advantage over honest businesspeople who pay their taxes. The Department of Revenue cannot and will not allow this to occur."

If you have information about tax theft, please call the Florida Department of Revenue investigations office at 561-640-2874.