Papa John's Franchise Owner Accused of Sales Tax Theft

A Papa John’s franchise owner who formerly operated a chain store in Bayside has been accused of a $217,000 state sales tax theft, the Queens district attorney said.

Syed Mehboob, 41, of Syosset, was arraigned late last week before Queens Criminal Court Judge Joel Blumenfeld on charges of grand larceny, offering a false instrument for filing, criminal possession of stolen property, filing false tax returns and falsifying business records.

If convicted, the defendant could face up to 15 years in prison, Queens DA Richard Brown said.

“When consumers pay sales taxes, they expect those funds to go into the public treasury, not into the business owner’s pockets,” the DA said. “New York State depends on the collection of taxes to operate its government. Criminal activity that cheats the government and the public will not be tolerated and will be vigorously prosecuted.”

Mehboob, who will return to court on Sept. 10, operated a franchise on 42nd Avenue in Bayside that went out of business. He also ran five other chain stores in Astoria, Corona, Sunnyside and Woodside.

The franchises allegedly under reported sales by approximately $4 million between March 1, 2005 and Nov. 30, 2010, New York State Taxation and Finance Commissioner Thomas Mattox said.

Mehboob is alleged to have stolen $217,000 in sales tax that he collected from customers, but did not forward to the state’s Taxation and Finance Department, the DA said.

In conducting an audit of the corporation for 2005 through 2010, the agency concluded that the defendant had allegedly collected $1.1 million in sales tax, but only reported $948,997 of it to the state.