Peabody, Salem Restaurant Owner Sentenced In $2 Million In Wage, Tax Fraud

PEABODY, MA — The owner of restaurants in Peabody, Salem and Seabrook, NH was sentenced to a year in prison four months after he pleaded guilty to keeping $1.5 million in sales tax revenue in Massachusetts and avoiding income tax obligations by paying nearly $1.5 million in wages to employees "under the table" over a six-year period from 2016 to 2022.

The U.S. Department of Justice said John Drivas, 66, of Hampton, NH, pleaded guilty to five counts of failure to collect and pay over employment taxes owed to the IRS and four counts of wire fraud for state meals taxes he collected from restaurant customers but failed to pay to the state Department of Revenue.

He was sentenced last week in federal court to one year and one day of prison and an additional year of supervised released.

Drivas was the owner and operator of three restaurants: Red's Sandwich Shop in Salem, Red's Kitchen and Tavern in Peabody, and Red's Seabrook in Seabrook, NH.

He was the sole shareholder of the Salem restaurant until he sold it to an employee in September 2022. He was the 100 percent owner of the Peabody restaurant with his wife and the 52 percent owner of the Seabrook restaurant with his children.

The U.S. Attorney's Office said court documents showed Drivas paid employees nearly $1.5 million in unreported wages at the three locations, which it said resulted in $439,000 in federal government employment tax losses.

The U.S. Attorney's Office said Drivas also collected $1.6 million in state and local meals taxes paid by restaurant customers, which he failed to pay to the state as required by law.

Salem and Peabody require restaurants and bars to collect an additional 0.75 percent local option meals excise tax.