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A Marion County judge this week dismissed with prejudice 27 felony tax charges against former Broad Ripple bar owner Robert Sabatini, finding that prosecutors launched the investigation without reasonable suspicion and relied on evidence obtained through unconstitutional searches.
The ruling came just over a year after Sabatini, the former owner of Average Joe’s Sports Pub & Grub, The Mineshaft Saloon and Rock Lobster, was charged.
Judge Clark Rogers found that the Marion County Prosecutor’s Office improperly obtained Sabatini’s confidential tax records and relied on false or misleading assertions to secure additional investigative subpoenas. He also determined that prosecutors unlawfully disclosed confidential tax information in public court filings.
“This Court finds that the search of Mr. Sabatini’s tax return information violated the most basic principles of the Fourth Amendment,” Rogers wrote in the 25-page order. He described the prosecutor’s review of confidential tax and financial documents as an unconstitutional “fishing expedition” that also violated the Indiana Constitution.
Prosecutors had alleged that Sabatini underreported nearly $4 million in sales and failed to pay about $350,000 in taxes from 2020 through 2023.
The Level 6 felony charges included 24 counts related to allegedly unpaid sales and food-and-beverage taxes and three counts of failure to keep records open for examination. Level 6 felonies each carry a maximum sentence of up to 2-1/2 years in prison and a fine of up to $10,000.
The judge concluded that some charges were outside the statute of limitations and that the three record-keeping counts were unsupported because the Indiana Department of Revenue had not requested the records during the period covered by the charges.
Neither Sabatini’s attorney nor Michael Leffler, a spokesman for the Marion County Prosecutor’s Office, returned messages seeking comment about the decision.
Sabatini formerly owned Average Joe’s Sports Pub & Grub, 816 Broad Ripple Ave.; Rock Lobster, 820 Broad Ripple Ave.; and The Mineshaft Saloon, 812 Broad Ripple Ave. Steve Wentland and Itamar Cohen became owners of all three bars in October 2024.
IBJ previously reported that financial records were subpoenaed in September 2023. In April 2024, search warrants were served at Sabatini’s home, his accountant’s office and each of the three bars. Investigators seized bank statements, tax returns, receipts, balance sheets, schedules, laptops, and vendor and sales documents, among other materials.
An analysis conducted as part of the prosecutor’s investigation cited several purported indicators that Sabatini was underreporting sales at Average Joe’s, including a low cost-of-goods-sold ratio compared with its staffing and payroll, recurring business losses and a low percentage of cash deposits relative to overall sales.
Rogers, however, found that investigators lacked knowledge of basic accounting principles and restaurant-industry standards, and that affidavits used to secure subpoenas contained false or misleading statements.
The investigation initially involved 11 Broad Ripple businesses, five of which were selected for further tax analysis, according to court records. Rogers found there was “no articulable individualized suspicion” that any of the businesses or their owners had committed a crime, “let alone tax evasion.”
A case against Connor’s Pub owner John Yaggi, which stemmed from the same Department of Revenue review, is still pending. Yaggi is alleged to have underreported sales at the bar at 6331 Ferguson St. by nearly $4.55 million. Prosecutors also allege he solicited sexual favors in exchange for giving an employee better-paying shifts.
Yaggi’s attorneys were denied permission in April to pursue an interlocutory appeal, which would have allowed them to challenge a pretrial ruling before the case concluded. A pretrial conference in the case is scheduled for Aug. 18.
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