{"id":37664,"date":"2022-10-25T20:23:48","date_gmt":"2022-10-26T02:23:48","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/former-durango-restaurant-owners-plead-guilty-to-cooking-the-books\/"},"modified":"2026-03-31T02:39:07","modified_gmt":"2026-03-31T08:39:07","slug":"former-durango-restaurant-owners-plead-guilty-to-cooking-the-books","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/former-durango-restaurant-owners-plead-guilty-to-cooking-the-books\/","title":{"rendered":"Former Durango restaurant owners plead guilty to cooking the books"},"content":{"rendered":"\n

\"Ken
Ken & Sue\u2019s restaurant in Durango was raided Wednesday by the Internal Revenue Service\u2019s criminal investigations unit.<\/span>Shane Benjamin\/Durango Herald<\/span><\/figcaption><\/figure>\n<\/p>

Kenneth and Suzanne Fusco, former owners of Ken and Sue\u2019s restaurant in Durango, have pleaded guilty to federal income tax evasion in connection with an undercover investigation by the IRS, the U.S. Attorney\u2019s Office for the District of Colorado announced Monday.<\/p>\n

The couple agreed to take a plea agreement and admitted to overstating their business expenses in 2014 through 2019, listing personal expenses as \u201ccustomer supplies\u201d in their accounting records, according to a news release from the U.S. Attorney\u2019s Office<\/a>.<\/p>\n

Unreported income totaled $933,586, resulting in a tax loss to the government of $160,536, the release says.<\/p>\n

The Fuscos, who pleaded guilty Oct. 13, are scheduled to be sentenced Feb. 6 in Durango\u2019s federal courtroom. They face prison sentences ranging from 12 to 41 months; a restitution payment of $160,536, the value of the federal income taxes owed; and a fine of $5,500 up to $55,000, according to the U.S. Attorney\u2019s Office.<\/p>\n

Suzanne Fuscos agreed to pay the restitution in full by the time of her sentencing, according to her plea agreement. The U.S. federal government agreed to recommend the minimum sentencing to the court in addition to a reduction in Suzanne\u2019s sentence length given that she took responsibility for evading federal taxes.<\/p>\n

The case was prosecuted by Assistant U.S. Attorneys Nikki Cassidy in Denver and Jeffrey Graves in Durango.<\/p>\n

The Fuscos could not immediately be reached for comment.<\/p>\n

The Fuscos listed Ken and Sue\u2019s restaurant for sale in early 2020. On Aug. 4, 2020, undercover IRS agents pretended to be interested in purchasing the restaurant and met with Kenneth and Suzanne at the restaurant, according to the plea agreement.<\/p>\n

The Fuscos gave the undercover agents a tour of their building. Unbeknownst to them, one of the agents was wearing a hidden video camera. After the tour, the agent told the Fuscos he or she was concerned about the restaurant\u2019s financial figures and how long it would take to make a return on investment after purchasing the property, the agreement recounts.<\/p>\n

Suzanne told the agent on camera that \u201cwe\u2019re masters at,\u201d and Kenneth finished her sentence, saying \u201cdisguising.\u201d Kenneth admitted, again on camera, that he and his wife used the restaurant to pay for personal expenses, the agreement says.<\/p>\n

The IRS used the Fuscos\u2019 recorded statements to obtain a search warrant for Ken and Sue\u2019s restaurant, the agreement says.<\/p>\n

On the morning of Aug. 26, 2020, an IRS criminal investigations unit raided Ken and Sue\u2019s at 636 Main Ave. Agents left the restaurant about 2 p.m. Karen Gurgle, a special agent and spokeswoman for the IRS in Denver, told The Durango Herald<\/em> then, \u201cWe were there on official business executing a warrant.\u201d<\/p>\n

The IRS agents \u201cseized voluminous accounting and tax records,\u201d according to the plea agreement. Agents also interviewed the Fuscos, who each admitted to using the business to pay their credit card balances, which they had \u201cused extensively\u201d for personal expenses.<\/p>\n

Suzanne and Kenneth Fusco admitted they listed their credit cards as \u201ccustomer supplies\u201d in their QuickBooks tax documents. They also admitted to keeping the categorization of their credit cards secret from their tax return preparers, the agreement says.<\/p>\n

\"Kurtis
Kurtis Murphy took over ownership of the former Ken and Sue\u2019s restaurant at 636 Main Ave. in March. Murphy based the restaurant\u2019s new name, 636 Main Ave, on its postal address. (Jerry McBride\/Durango Herald file)<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>

Ken and Sue\u2019s operated in Durango for more than 20 years. Earlier in 2020, before the restaurant was raided by the IRS, the Fuscos had announced plans to sell the business and retire.<\/p>\n

Today, Kurtis Murphy owns 636 Main Ave, a new bistro business that carries on the legacy of Ken and Sue\u2019s restaurant. Murphy was the top chef under the Fuscos\u2019 ownership.<\/p>\n

In a statement emailed Tuesday to The Durango Herald<\/em>, the restaurant said 636 Main Ave is a new restaurant and the owners have no knowledge of the previous business dealings.<\/p>\n

\u201cDuring the years discussed, Kurtis and Krista Murphy were living and working in Telluride,\u201d the email said.<\/p>\n

Efforts to reach Murphy on Tuesday were not immediately successful.<\/p>\n

During an interview with the Herald <\/em>in March, Murphy said he wants to maintain the \u201ccasual fine dining\u201d<\/a> experience Ken and Sue\u2019s offered patrons for more than two decades.<\/p>\n

He said he wanted to retain mainstay menu items, bring back customer favorites and make tweaks and upgrades to desserts and other menu items.<\/p>\n

cburney@durangoherald.com<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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