A judge denied a Lake in the Hills man’s request to have his conviction sealed after he received prison for defrauding the state out of over $3 million in tax revenue while owning almost a dozen Denny’s restaurants.
Kenneth Kilberger, 56, of Lake in the Hills, was charged in McHenry County Circuit Court on June 30, 2022, 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 pleaded guilty to the charge, court records show.
Then-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, as well as just over $3 million in restitution.
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 $42.2 million, defrauding the state of more than $3.2 million in tax revenue, Raoul said.
Records show Kilberger was the president of PFC Classic Dining Restaurant Group based in Algonquin.
The company owned dozens of restaurants in Illinois, Wisconsin, Indiana and other states.
State records show PFC Classic Dining Restaurant Group’s business registration has since been terminated in Illinois, while a similar P.F.C. Management Dining Company has an active business registration, with Kilberger being the president of the company.
It is unclear whether Kilberger still owns the 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 at the time of Kilberger’s conviction.
“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.
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.
Court records show Kilberger filed a petition to seal his case in April in McHenry County Circuit Court.
Kilberger said in his petition that he was eligible to have his case sealed because he had received a technical certificate during the period of his “last sentence” in the case.
Attached to the petition was an automotive service technician certificate for Kilberger obtained from Lake Land College.
Late in June, the Illinois Attorney General’s Office filed a response objecting to Kilberger’s request.
State law allows defendants to have records sealed upon termination of their “last sentence” if they earned a high school diploma, associate’s degree, career certificate, vocational technical certification, bachelor’s degree or GED during their “last sentence” period.
The law contains a provision that says it only applies to those who have not completed “the same educational goal prior to the period of his or her sentence or mandatory supervised release.”
Prosecutors argued that the state law does not apply to Kilberger because he presumably has an undergraduate college degree, as he was a licensed CPA at the time of the sales tax evasion scheme.
They also said that he obtained the automotive service technician certificate after his supervised release period and not during it.
While Kilberger still has an active CPA license in the state, the Illinois Department of Financial and Professional Regulation has an active complaint to discipline Kilberger due to his felony conviction.
Prosecutors said that sealing Kilberger’s case would have the effect of thwarting any disciplinary action against his CPA license undertaken by the Illinois Department of Financial and Professional Regulation.
A hearing on the request to seal his criminal case was held on Wednesday.
McHenry County Judge Tiffany Davis denied Kilberger’s request, saying that he is not eligible to have the case sealed until after May 19, 2026, at the earliest.