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Soupman CFO indicted on tax fraud charges

Indictment could imperil company’s ability to stay afloat, operator says

The chief financial officer of Soupman Inc. was indicted Tuesday on tax fraud charges after he allegedly failed to pay taxes for the company’s employees over a four-year period.

The company suggested this week that the indictment could cause serious problems in its ability to stay afloat. 

Robert N. Bertrand was charged in a New York federal court over failing to pay $594,000 in Medicare, Social Security and federal income taxes for employees at Soupman from 2010 through 2014.

Soupman, based in Staten Island, N.Y., immediately suspended Bertrand.

“The company is deeply shocked and saddened by these events,” Jamieson Karson, Soupman’s CEO, said in a statement.

Bertrand allegedly paid employees in cash on the side, along with “large unreported stock awards,” according to the U.S. Attorney’s Office in the Eastern District of New York.

From 2010 through 2014, Bertrand allegedly paid $2.9 million in cash and stock to employees.

Soupman will immediately launch an internal investigation to determine whether its public filings need to be amended during the period in question, Karson said. And he indicated that the indictment would hurt the company, which is struggling with financial losses. 

“We expect that this news will not make it easier for us to raise the capital we need to remain in business,” Karson said. 

Soupman Inc. licenses the recipes of Al Yeganeh, the “Soup Nazi” character from the television program “Seinfeld.” As of Aug. 31, 2016, Soupman had nine franchised locations. But in recent years, the company has focused more intently on selling its Original Soupman brand soup to grocers, convenience stores and other restaurant chains. 

The company’s most recent financial report said it no longer has revenue or costs associated with its franchise operations. About 6 percent of revenue last year came from franchising operations.

Soupman reported a net loss of $1.7 million in the six months ended Feb. 28, on revenue of $1.9 million. The company had a working capital deficit of $9.4 million.

“These factors raise substantial doubt about the Company’s ability to continue as a going concern,” Soupman said in its most recent earnings report. 

Contact Jonathan Maze at [email protected]

Follow him on Twitter: @jonathanmaze

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