The U. S. Attorney’s Office this week indicted Michael Weiss, the co-owner of Woody’s and the president of the board of Voyeur, on several counts of tax fraud, charging that he underreported more than $1.6 million in income from one of his other clubs.
Weiss was charged with two counts of filing false tax returns, two counts of aiding and abetting the preparation and filing of false tax returns and one count of corrupt endeavor to impede the due administration of the tax code, all in connection with his involvement with the Palmer Social Club, 601 Spring Garden St.
If convicted, Weiss could face up to nine years in prison and a fine of up to $750,000.
The grand-jury indictment, filed Jan. 26, is the culmination of a five-year investigation by the Internal Revenue Service.
Patricia Hartman, spokesperson for the U.S. Attorney’s Office in the Eastern District of Pennsylvania, said Weiss has not been arrested but will self-report for his initial appearance at 1:30 p.m. Feb. 3 in Courtroom 5-A, 601 Market St., before Hon. Jan E. Dubois.
Weiss did not return a call for comment.
The indictment focuses on 2004 and 2005, when Weiss served as the principal operating officer and manager of the Palmer Social Club and was responsible for the club’s finances.
Tom Bergstrom, an attorney for Weiss and the Palmer Social Club, said Weiss has not been directly involved with the club since 2002 or 2003, apart from supervising its books. When asked whether Weiss still oversees the club’s finances, Bergstrom said he’d “rather not go there for now.”
According to the indictment, a club employee collected all bar receipts and cash generated each night and recorded the transactions on a “tally sheet,” then delivered the sheet and the money to Weiss’ home in a garbage bag. Weiss allegedly then used accounting program Quicken to create two separate documents — one with the actual gross income from that night’s business and another with an underreported figure.
The indictment states that in 2004, Palmer Social Club brought in “approximately $1,411,373.55,” but the form 990, a tax form used by nonprofit organizations — which the club has been registered as since 1968 — reported a gross income of just $528,228, an understatement of $883,145.55. The indictment goes on to say that in 2005, Palmer had a gross income of $1,411,390.03, but only $641,409 was reported in that year’s 990, a difference of $768,981.03. Weiss signed both years’ 990s.
Bergstrom said he contests the allegations that Weiss created two separate documents for both years and also took issue with the numbers included in the indictment.
“We question the accuracy of the numbers that the government is alleging. We have a disagreement in terms of what they’re saying the gross receipts truly were,” he said.
Bergstrom added that the more-than $1-million profit the government says the club actually brought in each year is inaccurate.
“The Palmer Social Club is a nonprofit that is literally open only six hours a week — from midnight to 3 Friday and Saturday nights — so the numbers they’re reporting are just startling,” he said. “We’ll get there and work through it, but for right now, the issue is really the accuracy of those numbers.”
Voyeur also functions as a nonprofit social club under the name Mayfield Social Club, and Weiss and his brother Billy co-own the building that houses Voyeur. The brothers also co-own Woody’s, which they bought from previous owner Bill Wood in November 2006. The Weiss brothers previously owned Bump but sold the restaurant and bar — which has since been renamed Q — last summer.
Bergstrom said Weiss does the “bookkeeping and banking for a number of other entities that he, his brother or his father own,” but added he has “no reason” to believe the other properties are also being investigated.
Hartman said she could not comment on whether other businesses with which Weiss has been affiliated are being investigated or if other individuals could be implicated.
Jen Colletta can be reached at [email protected].