Restaurant Owner Arrested for Sales Tax Fraud

MEMPHIS - The Special Investigations Section of the Tennessee Department of Revenue conducted the investigation that led to the indictment and arrest of Peggy Jean Brown, former owner of Peggy’s Just Heavenly Home Cooking. Brown surrendered to the Shelby County Sheriff’s Office.

On February 15, 2022, the Shelby County Grand Jury indicted Brown on one Class E felony count of tax evasion and one count of submitting false returns.  The indictments allege Brown failed to remit all sales tax due by falsifying sales tax returns. 

“Investigations, such as this one, should warn retailers that failing to properly remit all the sales tax monies they collect is a crime, “ Revenue Commissioner David Gerregano said.  “The taxes collected from customers are property of the state and local governments at all times.  Customers have a right to know that the tax they pay will be remitted to the state and used for public good of all Tennesseans.”

If convicted, Brown could be sentenced to a maximum of two years in the state penitentiary and fined up to $3,000 for each Class E felony.

The department is pursuing this criminal case in cooperation with District Attorney Amy Weirich’s office. Citizens who suspect violations of Tennessee's revenue laws should call the toll-free tax fraud hot line at (800) FRAUDTX (372-8389). 

The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws and the collection of taxes and fees associated with those laws. The department collects about 87 percent of total state revenue. During the 2021 fiscal year, it collected $18.4 billion in state taxes and fees and more than $3.7 billion in taxes and fees for local governments. 

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