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A Brazen Tax Fraud Lands the Arena's Owner in Jail

While the high rise boom claims casualites on East U

by Eric J. Olsen, Sally Mitani

From the November, 2016 issue

The closing of The Arena marks the end of an interesting chapter in the downtown restaurant scene. In July, owner Brian Michael Flore was sentenced to two to five years in prison and ordered to pay $1.5 million in restitution for failure to pay state sales tax. According to a release from the state attorney general's office, Flore collected more than $700,000 in sales taxes from his customers over a ten-year period but neglected to pass the money on to the state.

The state department of treasury began an investigation into the Arena in 2013. Charged with failure to file taxes, Flore pleaded guilty in July 2015 and was given an eleven-month delayed sentence to allow him to make payments toward his past and current tax obligations.

While the case was in progress, the Arena was featured in an episode of Spike TV's "Bar Rescue," broadcast in November 2015. One of the show's running themes was that the bar's hostile environment and Flore's bad attitude were costing the business thousands of dollars each year. Several references were made during the program to the business's "million-dollar debt," but Flore maintained that the figure wasn't accurate. According to attorney general Bill Schuette, Flore did not complete the delayed sentencing requirements and stopped cooperating. The state then filed 120 counts of failing to file taxes against Flore--one for each month.

On July 13 of this year, Judge Rosemarie Aquilina of the Thirtieth Circuit Court in Ingham County handed down a sentence of twenty-four to sixty months for each of the 120 counts--but since the sentences will be served concurrently, Flore will be eligible for parole after two years. Flore's attorney, Andrew Abood, says he felt the sentence was "disproportionate" and unusual for a financial offense, especially for someone who was making an effort to pay.

According to Abood, the Friend of the Court had recommended a sentence of no more than eleven months, with ninety days "to become current"

...continued below...


on the debt. "It appears that the court was trying to set an example," Abood says, "but I'm not sure who for, as the sentence is so unusual for this type of case.

"In mid-October, the Ann Arbor News reported that new owners hope to reopen the bar by year's end as The Curtain Call.

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The student high-rise boom claimed a couple more retail casualties this year with the closing of Pita Pita and Lucky Kitchen on East University. Lucky Kitchen owner Jenny Wu sold her small building to the Collegiate Development Group to make way for a residential tower that will snake through the middle of the block all the way to Church St. She'd hoped to relocate elsewhere near campus, but in mid-October was sounding discouraged and had begun to look farther afield. Wu also owns the Lucky Kitchen on North Campus, which isn't going anywhere.

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Total Hockey chose its Oak Valley location when it opened two years ago because of the shopping center's proximity to the Ann Arbor Ice Cube just down the road. But Victor Sellinger, medical and fitness director at the Ann Arbor Running Company next door to the now-closed Total Hockey, quizzically points out that, close as it was, it couldn't get any closer than Perani's Hockey World, the pro shop inside the Cube, which has been there for about fifteen years.

Perani's manager, Frank Schinco, says Total Hockey did pick off a little of Perani's business "at first, but we were starting to get our customers back again." Then Total Hockey went into Chapter 11 bankruptcy over the summer (possibly for making location decisions like this one) and in August was bought out by Pure Hockey, a chain with twenty-plus locations in the Northeast. Total Hockey's Novi and Troy stores are still open for now, to try to liquidate the chain's assets.

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Got a retail or restaurant change? Email sallymitani@gmail.com or leave voicemail at 769-3175, x 309.     (end of article)

[Originally published in November, 2016.]

 

 
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