Lake in the Hills man who owns multiple Denny’s pleads guilty to sales tax evasion

A Lake in the Hills man pleaded guilty on Wednesday to defrauding the state out of more than $3 million in sales tax revenue from 11 Denny’s restaurants that he owned and operated in Illinois, according to the Illinois Attorney General’s Office and court records.

Kenneth Kilberger, 53, of the 1000 block of Mason Lane, was subsequently sentenced to four years in prison followed by one year of mandatory supervised release, court records show. He also was ordered to pay about $25,800 in fines and court costs.

Kilberger was accused of misrepresenting the sales at the restaurants between January 2016 and October 2020 to evade paying sales tax, according to a motion the attorney general’s office filed on June 30.

He allegedly underreported the restaurants’ sales by about $42 million, defrauding the state out of more than $3 million in tax revenue, the attorney general’s office said in its news release.

“Business owners who defraud the state out of tax revenue harm their communities by depriving needed programs and services of funding,” Illinois Attorney General Kwame Raoul said in a statement.

Kilberger is the president and CEO of PFC Classic Dining Restaurant Group of Algonquin, which owns 29 Denny’s locations in Illinois and Indiana and one Ruby Tuesday in Wisconsin, according to the company’s website.

“Illinois retailers often make considerable sacrifices to timely file returns and pay sales tax,” Kilberger said in a written statement provided by his attorney. “I realize now that by underpaying sales tax and plowing the money back into the business, I broke rules that others were doing everything to obey.”

Kilberger said he will regret “this choice for the rest of my days,” apologized to his fellow Illinois residents and to the Department of Revenue, and said he has done his “best to undo the harms” he caused.

The Illinois Department of Revenue’s Criminal Investigation Division conducted the investigation through an initiative targeting sales tax evasion and theft of government funds, according to the release. Since the conclusion of the investigation, Kilberger has paid all back taxes owed, according to the release and court records.