Kenneth Kilberger, 53, of Lake in the Hills, pleaded guilty to defrauding the state out of millions in sales tax that was owed from his Illinois restaurants that he owns, prosecutors said. | Background Photo: Google Street View

A Lake in the Hills man, who is the owner of numerous Denny’s restaurants, has been sentenced to four years in prison for defrauding the state out of more than $3 million in tax revenue.

Kenneth Kilberger, 53, of the 1000 block of Mason Lane in Lake in the Hills, was formally charged in McHenry County Circuit Court on June 30 with one count of sales tax evasion over $100,000, a Class 1 felony.

Less than a week later, Kilberger entered into a negotiated plea deal and on Wednesday pleaded guilty to the charge, court records show.

McHenry County Judge Robert Wilbrandt approved the plea deal and Kilberger was sentenced to four years in the Illinois Department of Corrections.

He was also ordered to pay over $25,000 in fines and court costs related to the case.

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Illinois Attorney General Kwame Raoul said that from January 2016 to October 2020, Kilberger evaded taxes on sales from 11 Denny’s restaurants he owned and operated within the state of Illinois.

Kilberger underreported the restaurants’ sales by approximately $42 million, defrauding the state of more than $3 million in tax revenue, Raoul said.

Records show Kilberger is the president of PFC Classic Dining Restaurant Group based in Algonquin.

Kilberger owns dozens of restaurants in Illinois, Wisconsin, Indiana and other states.

“Business owners who defraud the state out of tax revenue harm their communities by depriving needed programs and services of funding,” Raoul said.

“I commend the Illinois Department of Revenue for its work on this case and am committed to our continued collaboration in recovering critical revenue and holding accountable the individuals who attempt to defraud the state,” he added.

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The investigation was conducted by the Illinois Department of Revenue’s (IDOR) Criminal Investigation Division through an initiative targeting sales tax evasion and theft of government funds.

Kilberger has since paid all back taxes owed to the IDOR, the attorney general’s office said.

“Individuals who falsify sales taxes are not just stealing from the state, but also from the residents who rely on the important programs and services that tax revenue provides,” said Illinois Department of Revenue Director David Harris.

“I congratulate and appreciate the continued partnership of the Department of Revenue’s Bureau of Criminal Investigations and the Attorney General’s Office as we continue to work together to hold these individuals accountable,” Harris said.

Kilberger surrendered himself to the custody of the McHenry County Jail on Wednesday.