Landmark Wellington restaurant La Casa Pasta is under new management after its former owner was caught out evading tax and filing false returns.
Darrell Earl Antonopoulos pleaded guilty to three charges of submitting false income tax returns and 24 charges of providing false GST returns with the intention of evading tax.
The restaurateur was sentenced to five months home detention and 200 hours community work.
Tony Moris, Inland Revenue assurance manager investigations, said a significant number of La Casa Pasta customers paid in cash but the company did not disclose any of these sales and Mr Antonopoulos diverted the cash for his own benefit.
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"Mr Antonopoulos admitted to knowing his tax obligations yet deliberately filed false tax returns on behalf of his company over a four year period and dealt in cash."
An analysis of Mr Antonopoulos's financial records showed that the restaurant's gross profits were low when compared to other similar businesses.
"Benchmarking the performance of businesses within the same sector enables Inland Revenue to identify taxpayers likely to be suppressing income," Mr Morris said.
"Once identified, Inland Revenue has a number of techniques and tools at its disposal to verify whether cash sales have been omitted and to quantify that omission."
Inland Revenue has recovered $361,000 from Antonopoulos while just over $88,600 remains outstanding.
La Casa Pasta, which has been serving up cheap pasta on Dixon St for many decades, has been sold and is under new management.