A New Jersey man who co-owned fast-food restaurants in several states pleaded guilty on Aug. 28 to conspiring to commit federal tax fraud, according to the U.S. Attorney’s Office for the Southern District of Ohio.
Ali Shahid Butt, 56, of Princeton Junction, admitted to playing a central role in a multi-year scheme that defrauded the IRS of more than $2.4 million. As part of his plea agreement, Butt has agreed to pay that amount in restitution to the Internal Revenue Service.
Butt is identified on LinkedIn as CEO and president of AR Group of Restaurants Inc., which operates several fast-food restaurants, including Popeyes locations nationwide. The company opened a Popeyes in East Windsor Township in 2021.
According to federal prosecutors, between 2015 and 2021, Butt co-owned multiple fast-food establishments in the Midwest and Mid-Atlantic regions, including a restaurant in Zanesville, Ohio. Authorities say Butt oversaw many of the operations and maintained control over relationships with the restaurant franchisor.
Court documents show that, with Butt’s knowledge, his franchise co-owners and managers paid certain employees in cash—often because the workers were undocumented immigrants without legal work authorization—and failed to report those wages or pay the required employment taxes.
Federal officials said Butt and co-conspirator Bahadar “Sam” Durrani caused a tax loss of more than $1.2 million at several locations, including the Zanesville restaurant, by failing to withhold and remit employment taxes on cash wages.
Butt was charged by a bill of information on Aug. 11 and entered his guilty plea Tuesday before U.S. District Court Judge Edmund A. Sargus Jr.
Durrani has also pleaded guilty and is scheduled to be sentenced in October.
The plea announcement was made by U.S. Attorney Dominick S. Gerace II, IRS Criminal Investigation Special Agent in Charge Karen Wingerd, and Jared Murphey, acting special agent in charge of Homeland Security Investigations in Detroit. Assistant U.S. Attorney David J. Twombly is prosecuting the case.
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