Proino Breakfast Club owner charged with not paying state taxes

LARGO — Just before noon on a recent Sunday at Proino Breakfast Club, the dining room was bustling as owner George Soulellis chatted with a customer.

It was not even a month earlier the owner of the popular downtown restaurant was sitting in jail in Clayton County, Ga., picked up by Atlanta airport police as a fugitive.

His July 27 arrest stems from a theft of state funds charge brought by the Florida Department of Revenue after Soulellis, 48, withheld about $35,600 in sales tax revenue, according to an affidavit filed by a state investigator. The arrest is the latest in a series of financial problems for Soulellis and his restaurant, once voted "Best of Largo" in a contest sponsored by the city and the Largo Leader.

Soulellis declined to comment, referring a reporter to his Tampa-based lawyer, James Sutton.

Sutton said this week that his client paid back the state in full. The arrest was a misunderstanding, Sutton said: Soulellis thought the unpaid sales tax would be handled in an ongoing bankruptcy proceeding for his restaurant.

"He was not aware that the matter would still be forwarded to the State Attorney's Office," Sutton said.

PREVIOUS COVERAGE: Proino Breakfast Club, named 'Best of Largo,' has trail of money problems, records show.

According to the affidavit, sales tax payments filed for Proino's downtown location at 201 W Bay Drive bounced for May and July 2015, May 2016, and the period from August 2016 through December 2016. Payments for the second location at 14400 Walsingham Road had the same issue during the months of April, May, August, September and November 2016.

The department reached out to Soulellis to try to resolve the problem.

"Mr. Soulellis promised on several occasions that he would take care of all the delinquencies but did not," the affidavit states, adding that he was offered a payment plan. "George Soulellis provided the required financial information, made the initial down payment, but did not make required payments to pay off the delinquency."

In an interview with the investigator, Soulellis said he used collected sales tax to fund a third Proino location and keep the first two up and running.

The affidavit doesn't specify where the third location was supposed to be, but state business records show he filed paper work under the restaurant's name at 770 S Gulfview Blvd on Clearwater Beach. His former business partner, Ernest Utegaard, told the Tampa Bay Times last year he and Soulellis went their separate ways but declined to say why, citing a confidentiality agreement. Utegaard took over the lease and has since opened his own restaurant, the Floridian Beach Cafe.

A warrant for Soulellis' arrest was signed in July. Atlanta police officers took Soulellis into custody at the Hartsfield-Jackson Atlanta International Airport. Sutton said he was returning to the U.S. from a funeral in Canada — his home country, according to jail records.

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Soulellis, whose listed address is a condo in a waterfront complex on Clearwater Beach, was booked into a jail in Georgia. He paid restitution that included the unpaid sales tax and investigative costs for the state, said Bruce Bartlett, the chief assistant state attorney for Pinellas and Pasco counties. His office is still pursuing the charge, Bartlett said.

"He apparently has some pretty decent businesses," he said, "so I'm not real sure what circumstances existed to get him into this position."

The restitution payment allowed him to go back to Florida, where he turned himself into the Pinellas County Sheriff's Office and was booked into jail, Sutton said. He was released the same day after posting $25,000 bail, according to jail records.

Federal court records show Soulellis filed for Chapter 11 bankruptcy in March on behalf of the Proino downtown location. Filings show a list of parties the company owes money to: three food distributors, the store's landlord, the state department of revenue and the Internal Revenue Service.

Sutton isn't representing Soulellis in the bankruptcy proceedings but said Soulellis intends to pay back his debts and reorganize the business to keep everything operational.

"My client is just trying to get his life back in order," he said.

Times senior researcher John Martin contributed to this report. Contact Kathryn Varn at (727) 893-8913 or kvarn@tampabay.com. Follow @kathrynvarn.