Prosecutors: Uptown Restaurateur Hid More Than $1.1M From State
Prosecutors charged the owner of a recently closed Uptown restaurant with 68 felony counts of filing false tax returns and failing to pay sales tax , the Hennepin County attorney’s office announced Wednesday.
Michael Whitelaw, 46, of Eagan, is accused of underreporting sales by more than $1.1 million and underpaying the sales tax by more than $100,000 while operating Social House at 2919 Hennepin Avenue S.
“Mr. Whitelaw knowingly took the money his customers rightly thought was going to the state government and kept it for his business,” Hennepin County Attorney Mike Freeman said in a statement. “That type of behavior cheats the taxpayers who are following the law and cheats other businesses in competition with Mr. Whitelaw.”
The Minnesota Department of Revenue investigated Whitelaw and Social House’s parent corporation, Food Group Holdings LLC, where Whitelaw is a corporate officer and managing member. The Hennepin County attorney’s office said evidence against Whitelaw includes records from the revenue department and from banks where Food Group Holdings had accounts. Social House closed abruptly in June after nine years at the location, previously operating as Fusion and Zeno. A note hung in the window that read, “Our landlord has terminated our lease and has forced us to move out.”
According to the complaint, Whitelaw filed fraudulent sales tax information monthly with the revenue department between 2009 and 2011. The Hennepin County attorney’s office also said Whitelaw had been audited before 2009 by the revenue department for failing to file accurate sales tax returns and pay the correct amount of sales tax. After the audit, Whitelaw was told the right way to file sales tax returns, the office said. When asked whether Whitelaw was fined or any other action was taken after the earlier audit, a spokeswoman said the revenue department could not comment on private or nonpublic taxpayer information..
Each count carries a maximum sentence of five years in prison and/or a $10,000 fine. Prosecutors said Whitelaw has no criminal history. As of Feb. 11, the total amount due to the state by Whitelaw’s company for sales tax, penalty and interest was $171,391.
Whitelaw does not yet have a first court appearance scheduled.