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March 21, 2018

Owner of J's Oyster sentenced to jail for pocketing sales tax

The owner of J’s Oyster, an iconic restaurant and bar on Portland’s waterfront, has been sentenced to four months in jail for pocketing sales taxes paid by the restaurant’s customers, as well as for failing to pay her personal and corporate income taxes.

In a news release issued Tuesday, Maine Attorney General Janet Mills reported that Cynthia Brown, 58, of Portland, was sentenced by Justice Lance Walker of Cumberland County Superior Court on March 19. Walker sentenced Brown to four years in jail, with all but four months suspended, followed by three years of probation.

Mills said that from March 2008 through March 2015 Brown collected sales tax from restaurant patrons, but failed to turn over to Maine Revenue Services most of the sales tax she collected. She also said Brown illegally kept the remaining funds for her own personal and business use and underreported the restaurant’s taxable sales and sales taxes collected, which enabled Brown to steal over $800,000 in sales tax.

Brown also failed to pay personal and corporate income tax during this time period, Mills stated.

“Maine citizens trust business owners to pay over the sales taxes charged to their customers to Maine Revenue Services and to pay personal and corporate taxes on the income that they earn,” Mills said. “My office will pursue individuals who abuse the trust placed in them to collect sales tax for the benefit of the people of the State of Maine. We also will strive to recover as much restitution as possible in order to make Maine taxpayers whole.”

This case was investigated by the Maine Revenue Services’ Criminal Investigations Unit. Assistant Attorney General Gregg D. Bernstein handled the matter for the Attorney General’s Criminal Division.

Total restitution in the case was $1,302,681, according to the Attorney General’s Office.

After pleading guilty in January 2017, Brown paid over $829,000 towards her restitution obligation. She is required to pay the remaining $473,315 in restitution as a condition of her probation.

The Bangor Daily News reported that Brown told the newspaper before pleading guilty last year she had “grossly underestimated” her sales because she was struggling with mental illness and spending little time attending to the restaurant’s business.

“The truth is I do owe the sales tax,” Brown told the BDN at that time. “But … I have in good faith been paying all this money back.”

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