Federal prosecutors called John Worthington, owner of Reisterstown restaurant The Grill at Harryman House, a “serial tax cheat,” saying he stole more than $2.8 million over 11 years by not paying taxes — and that’s only what they could pin down. They could find no record of him meeting his tax obligations as an employer for about 25 years.
But a judge rejected their request for more than two years behind bars for Worthington, 60. Instead, U.S. District Judge Julie Rubin ordered him to serve three years of probation in addition to paying restitution.
Defense attorney Andrew C. White successfully argued that Worthington wasn’t motivated by greed, but was trying to keep the business open.
“It was a fraud case, but the object of the fraud was to keep open a restaurant and perform good deeds,” White said after the hearing. “This case involved no greed. He did not feather his nest.”
Prosecutors overstated his income and mischaracterized expenditures, White said. While the government said some employees suffered hardships as a result of his conduct, the courtroom was filled with former employees who he had helped over the years.
Worthington pleaded guilty in June to charges of willful failure to account for and pay over taxes and willfully making and subscribing a false tax return. Prosecutors said that since taking over The Grill at Harryman House in 1995, Worthington never filed forms with the IRS to report his company’s quarterly employment tax liability, nor did he pay over employment taxes to the IRS through 2021.
Since 2010, they said he collected trust fund taxes from his employees’ wages but never reported or paid the taxes to the IRS. In 2016, Worthington filed an individual income tax return that fraudulently claimed a $9,000 refund from the IRS when he owed approximately $15,111 in taxes. And from 2017 to 2021, Worthington failed to timely file any individual income tax returns.
“For 25 years, Worthington ran a restaurant. For those same 25 years, he was a serial tax cheat,” prosecutors wrote in a sentencing memorandum.
Sentencing guidelines called for a 24- to 30-month period of incarceration.
Prosecutors said his “decades-long disregard for the nation’s tax laws was not born out of desperation.”
“He used the proceeds of the fraud to help pay himself a generous tax-free salary and to pay for personal expenses, including country club membership dues, season tickets to the Baltimore Orioles, international vacations, college tuition for his two children, and mortgage and vehicle payments,” they wrote.
White said that Worthington went in on Orioles tickets with a group, and only attended a handful of games. The international trips were paid for using credit card points and cheap airfare, he said.
The government said Worthington paid himself an annual salary of $273,375 from 2016 to 2021, but White said it was actually about $207,000.
“While this in no way excuses Mr. Worthington’s failure to pay the employment taxes, it is consistent with Defendant’s Sentencing Memorandum, which accurately represents Mr. Worthington’s difficult financial situation,” White wrote in a supplemental filing. “Specifically, he was operating a struggling business and trying to keep things afloat and as normal as possible for his employees and family.”
White filed Worthington’s sentencing memorandum under seal, but prosecutors filed a copy of notes from Worthington’s interview with the IRS in which he said he knew he owed payroll taxes but did not owe corporate taxes because the business “doesn’t make any money.” He said he wanted to sell the business and couldn’t sleep.
“The fact remains that John Worthington is a good and decent man who withheld taxes from the Government and in so doing allowed his employees to work, his children to succeed, and charities to prosper,” White wrote in a court filing.
White said Worthington is saddled with crushing debt from the restitution he must pay, and will continue to operate The Grill at Harryman House.
“The restaurant is still open for business,” White said.
