New York Restaurant Owner Cooks the Books and Ends Up in Hot Water

Adel Kellel, the owner of Raffles Bistro, located inside New York City’s Lexington Hotel, was sentenced to two years in prison for tax evasion.

From 2012 to 2015 Kellel hid more than 2.1 million dollars in gross receipts from his accountant and the IRS. This represented 43% of the revenue the hotel paid Kellel for services such as room service, banquets and catering. He also diverted a portion of cash income received from Raffles’ customers.

Kellel used the diverted income on rent for a high-end Manhattan apartment, college tuition payments for his children, domestic and international travel, shopping at luxury retailers, and for luxury cars including a Mercedes Benz, a Porsche and a Maserati.

By filing false tax returns from 2011 to 2015, Kellel caused a combined tax loss of $771,195 to the IRS and the New York State Department of Taxation and Finance.

In addition to the prison sentence, Kellel has been ordered to pay restitution in the amount of $613,478 to the IRS and $157,717 to New York State.

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