The owner of three North Shore restaurants has been sentenced to prison for tax fraud. John Drivas, 66, from Hampton, N.H., was sentenced in a federal court in Boston by U.S. District Judge Julia E. Kobick to one year and one day in prison followed by one year of supervised release. Drivas must also pay restitution of $1,596,775 to the Massachusetts Department of Revenue and $439,341 to the Internal Revenue Service (IRS), along with a $20,000 fine.
Drivas pleaded guilty in September 2024 to multiple charges including five counts of failure to collect and pay over employment taxes owed to the IRS and four counts of wire fraud related to state meals taxes collected but not paid to the state Department of Revenue.
Between January 2016 and October 2022, Drivas operated three restaurants: Red’s Sandwich Shop in Salem, Red’s Kitchen and Tavern in Peabody, and Red’s Seabrook in Seabrook, N.H. He was the sole shareholder of the Salem restaurant until its sale in September 2022. He co-owned the Peabody location with his wife and held a majority stake in the Seabrook restaurant with his children.
Drivas admitted to paying “under-the-table” wages totaling $1,496,417 from at least January 2017 through June 2022 without reporting these wages or paying employment taxes on them. This led to more than $439,000 in employment tax losses for which he was responsible.
Additionally, Drivas failed to remit collected state and local meals taxes as required by law. In Massachusetts, restaurant owners must collect a sales tax on meals amounting to 6.25%, with an additional local option excise tax of 0.75% applicable in Salem and Peabody. Despite collecting these taxes from customers, Drivas withheld $1,596,775 from payments due to the Massachusetts Department of Revenue.
The case announcement was made by United States Attorney Joshua S. Levy alongside Thomas Demeo from the IRS Criminal Investigation Boston Field Office and Katherine Mulligan from the Insurance Fraud Bureau of Massachusetts. The Massachusetts Department of Revenue’s Criminal Investigations Bureau provided assistance during this investigation while Assistant United States Attorney Victor A. Wild prosecuted the case.