John Drago Pleads Guilty To Fraud

CENTRAL ISLIP, NY —On Thursday, Long Island business owner John Drago entered a guilty plea to fraud charges for evading taxes and illegally structuring transactions at multiple check cashing stores. He faces up to ten years in prison.

Drago operated Kayla Check Cashing Corp., North Island Check Cashing Corp., South Island Check Cashing Corp., East Island Check Cashing Corp., Bay Shore Check Cashing Corp. and Brentwood Check Cashing Corp.

The 57-year-old Central Islip resident also has to forfeit $253,000 and to pay restitution of approximately $593,000. He will be unable to apply for check cashing licenses in the future.

According to the Justice Department's Eastern District of New York, from 2010 to 2013, Drago led employees in illegal cashing of checks to avoid filing Currency Transaction Reports. In total he avoided disclosing over $9 million dollars to the IRS. He also failed to report cash payments to employees.

"Drago's plea today acknowledges his egregious misuse of Kayla Companies as a conduit to circumvent mandatory CTR filing requirements and evade employment taxes of Kayla Company employees. Greedy tax evasion schemes such as those facilitated by Drago, critically impair the integrity of our financial system and directly impact employees, who may see future benefits such as Social Security, Medicare or Unemployment Compensation reduced or eliminated because of Drago's willful disregard of the law." IRS Acting Special Agent-in-Charge Thomas Fattorusso said in a statement from the Department of Justice.