City ‘looking at’ River Cafe in sales tax scheme

The Brooklyn Papers / Greg

City auditors are investigating the River Café this week after officials claimed that the staff at the restaurant’s sister eatery in Manhattan was misreporting revenues to avoid the tax man.

Comptroller John Liu charged this week that workers at Michael “Buzzy” O’Keeffe’s E. 34th Street eatery didn’t ring up 25 percent of their sales in 2009 — and likely did not fork over the tax money from those sales.

It’s unclear where that money went, or whether workers actually committed any crime, but auditors have turned their attention towards O’Keeffe’s workers at the legendary haute outpost in DUMBO, the River Café.

“We are looking at it,” said a source in Liu’s office, who requested anonymity because he is not authorized to talk about ongoing investigations.

If O’Keeffe’s workers at River Café are doing the same thing that they’re charged with doing at the Water Club, the restaurant owner will have some explaining to do. According to the audit, which is posted online at comptroller.nyc.gov, undercover agents caught workers entering “No Sale” into the register for every four guest checks entered — failing to claim a sale nearly 6,500 times during 2009.

Liu’s office may also be looking into O’Keeffe’s sweet deal for his city-owned space under the Brooklyn Bridge. O’Keeffe’s lease on the property with the million-dollar views runs through 2025. He pays just $6,177 in rent every month, or just over $74,000 annually. He pays more if his gross receipts top $8.25 million, but last year, O’Keeffe reported taking in $6.2 million.

The city says that O’Keeffe — who took a chance in 1977 when he built a high-end restaurant in DUMBO when it was little more than an industrial neighborhood — pays rent on time, every time.

O’Keeffe did not return several calls for comment.

River Cafe owner Buzzy O'Keeffe.