The Beach House owner Pleads Guilty to Tax Evasion

Kenneth J. O'Brien told an undercover agent "I steal five to ten thousand a month," according to court records.

Patch File Photo
Patch File Photo
The owner of The Beach House in Portsmouth pleaded guilty in federal court in Providence today to three counts of tax evasion.

Authorities said Kenneth J. O'Brien, 47, of Portsmouth, falsified tax returns, kept two sets of books and pocketed cash in a scheme to avoid paying taxes on nearly $1 million in revenue.

United States Attorney Peter F. Neronha and William P. Offord, Special Agent in Charge of Internal Revenue Service Criminal Investigation, announced the guilty plea in a statement Thursday, saying O'Brien told an undercover agent that "I steal five to ten thousand a month."

"On a slow month, five, on a good month, ten," he reportedly told the agent.

Court records show O'Brien allegedly failed to disclose $929,095 in income from the business, failing to pay the IRS $171,990 in taxes, plus interest and penalties over the course of three years between 2007 and 2010.

O'Brien could face up to five years in federal prison and a fine of $100,000 when sentenced on Sept. 2. 

O'Brien entered his guilty plea before U.S. District Court Judge John J. McConnell Jr., and in his admission, said he kept two sets of business bookkeeping records, pocketed the cash and ultimately falsified his personal income tax returns.

The investigation was spurred by a July 2011 IRS review that saw The Beach House was listed for sale. That sale uncovered the double set of books. One set was the true record of the business' income - the second was "fictitious for the purpose of third party disclosures necessary to maintain and operate the business," a release stated.

The case is being prosecuted by Assistant U.S. Attorney Richard W. Rose, with the assistance of Assistant U.S. Attorney Terrence P. Donnelly.

meme May 31, 2014 at 01:46 AM
well i sat in that bar one nite ordered drinks and watch the bartender poor rum and coke all nite she took the rum from the same spot every time and when confronted bartender stated that it was different rum well i didnt ask for different rum in my drink,,well if the bartender wasnt wrong howcome the owner gave me a free round when i went in there i think the bartender thought i was to drunk to realized my receipt plus it was new years at 1245am well i caught her it not personal it call trying to rip the customer off that whyy this friday wasnt as packed as normal business is going down hill and all their employee will be out of job for the summer good luck trying to find another job with the beach house reference
islandgirl1 May 31, 2014 at 02:42 PM
I have been there a few times over the years and each time was surprised at how often the bartenders over served their customers. I saw people stumbling out the door, vomiting on the sidewalk and generally causing problems in the neighborhood, not to mention the fights inside the bar. Needless to say I no longer frequent the place and I for one can't wait till it closes or sells (hopefully to a more responsible owner).
Aires June 01, 2014 at 05:39 AM
Aires, They should be closed down for over serving their customers. 7 years ago I was hit by a drunk driver who had been over served and spent days in intensive care at RI Hospital
outside look June 02, 2014 at 03:52 PM
Not surprised, but yet somewhat surprised on how stupid he was. Would of been ok if he didnt brag. Sometimes its better to keep your business to yourself, thief or not.
Not my first rodeo June 17, 2014 at 04:13 PM
Doing blackout karaoke is a blast though!!!!


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