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The owner of a popular Broad Ripple pub is facing criminal charges after allegedly underreporting sales to the state, part of a broader tax investigation involving multiple area bars.
John Yaggi, owner of Connor’s Pub, 6331 Ferguson St., faces multiple felonies related to failure to remit taxes, the Marion County Prosecutor’s Office announced Thursday.
Investigators issued a search warrant at the bar and Yaggi’s home in April 2024, seizing bank statements, purchase invoices, inventory lists, tax returns, vendor payments, menus, credit card batch reports and other business records.
Investigators examined financial documents, inventory and pricing to conclude that reported sales were significantly lower than expected sales. Investigators within the Department of Revenue identified multiple indicators that Yaggi and Connor’s Pub were underreporting sales, including a low cost-of-goods-sold ratio; recurring business losses; and a low percentage of cash deposits relative to overall sales.
Investigators allege the bar underreported sales by nearly $4.55 million, and failed to remit $318,443 in sales tax and $90,983 in food-and-beverage tax, according to court records.
In all, Yaggi faces nine Level 6 felonies related to the tax investigation. Level 6 felonies carry a maximum sentence of up to 2-1/2 years and a fine of up to $10,000.
Attempts to reach Yaggi on Thursday by phone were unsuccessful.
“White collar crime is a priority of the Prosecutor’s Office because every business deserves an equal opportunity to compete,” Prosecutor Ryan Mears said in a written statement. “The allegations outlined in the probable cause affidavit are more than financial misconduct but a repeated pattern of fraud and deceit that harms the community.”
Investigators spoke to multiple current and former employees who raised concerns about certain business practices and record-keeping at the bar. Several employees reported being paid significantly less than minimum wage, and in some cases were paid in cash “under the table,” according to court records. Another employee told investigators the bar did not have a typical point-of-sale system, allowing them to ring up purchases in a cash register, and the register did not have a typical computer system, meaning patrons were not given printed bills—instead, servers kept handwritten records of orders, and Yaggi managed and closed out the register.
Yaggi also faces a misdemeanor charge of making an unlawful proposition, after conversations with investigators revealed allegations that he solicited sexual favors in exchange for giving an employee better-paying shifts, according to court records.
The investigation, which began in July 2023, involved representatives from the Marion County Prosecutor’s Office Grand Jury Division; the Marion County Sheriff’s Office; Indiana State Police; Indiana State Excise Police; and the Indiana Department of Revenue.
The initial investigation involved more than 10 Broad Ripple bars, but only four were examined further. However, based on an online search of Marion County court records, it does not appear the owner or owners of the other establishments have been charged with a crime related to the investigation. Therefore, IBJ is not identifying the other subjects or establishments under investigation.
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