The former owner of the Melting Pot restaurant in downtown Minneapolis failed to pay more than $860,000 in employment taxes and instead used the money on a half-finished Irish pub near Target Field.
David Dale Ahern on Wednesday pleaded guilty in U.S. District Court to “conspiracy to defraud the United States” for his part in the scheme.
The government said Ahern and his sister, Kelly Louise Jaedike, in 2002 formed a holding company called Slainte LLC to own and operate the Melting Pot. Jaedike’s case was continued until January.
The Internal Revenue Service in an indictment filed in September said the brother-and-sister team withheld more than $180,000 from workers’ paychecks but failed to use it to pay employment taxes from August 2006. Jaedike, who ran the restaurant, was personally assessed the back taxes.
The IRS said the pair in 2007 formed a second holding company, New Grange LLC, that concealed Jaedike’s continued involvement with the Melting Pot. The indictment said under New Grange, the pair failed to pay more than $680,000 in additional employment taxes from multiple quarters in 2009 through 2011.
Instead of paying those taxes, the indictment said Ahern and Jaedike used the funds for their personal benefit, including house and car payments for Jaedike and expenses related to opening the new Irish pub near Target Field.
Ahern and Jaedike started work in 2010 on Ahern’s Irish Pub, which was going to be 14,000 square feet and on the light rail line a block from Target Field. This was right after the ballpark had opened, revitalizing development in the Warehouse district neighborhood.
At some point, work on the pub stopped, and it never opened. The site now houses Cowboy Jack’s.
After filing Chapter 11 bankruptcy for the Melting Pot in 2011, the team was removed as owners.
In August 2012, Jaedike and her husband, Brian, filed for Chapter 7 bankruptcy for Melting Pot, Slainte LLC, New Grange LLC and other business ventures, listing $697,000 in assets and $1.4 million in liabilities.