New Hyde Park Restaurant Owner Headed To Prison For Tax Evasion

NEW HYDE PARK, NY — A New Hyde Park man and owner of a former New York City restaurant has been sentenced to two years in federal prison after pleading guilty to a federal tax evasion charge.

Adel Kellel, the 63-year-old owner of Raffles Bistro, was sentenced Monday in Manhattan after pleading guilty to evading taxes from 2011 through 2015. In doing so, he admitted avoiding about $770,000 in taxes to the IRS and the state Department of Taxation and Finance. Kellel was also ordered Monday to pay the IRS about $613,000 and pay state tax authorities about $158,000, as well as serve three years of supervised release.

"Adel Kellel cooked his books to conceal income from the IRS and his own accountants," Audrey Strauss, Acting U.S. Attorney for the Southern District of New York, said in a statement. "He spent the ill-gotten gains on personal luxuries like a Mercedes, a Porsche, and a Maserati. Now he will spend two years in federal prison."

Kellel was president and a 45-percent owner of K&H Restaurant in 2011. The company operated the now-closed Raffles Bistro, which was inside the Lexington Hotel in East Midtown. From 2012 through 2015, Kellel completely owned the restaurant company.

He hatched a scheme to avoid paying income taxes by diverting — and failing to report to the IRS — a large portion of the company's gross receipts for four years beginning in 2011, prosecutors said. As part of the scheme, he diverted over 150 hotel checks, totaling over $2.1 million in gross receipts, and hid them from his accountants and the IRS. Kellel concealed these receipts, which represented about 43 percent of this particular revenue stream for the restaurant, by depositing them into more than a dozen bank accounts that he did not share with his accountants. Kellel also diverted customer cash, some of which he deposited into his own bank accounts or spent on himself, without disclosing it to his accountants or paying taxes on.

He used diverted income on overseas transfers, condo fees, rent for a high-end Manhattan apartment, college tuition for his kids, shopping at luxury stores, such as Hugo Boss and Saks Fifth Avenue, luxury cars made by Mercedes, Porsche, and Maserati, and domestic and international travel.