Ron Razete, founder of the Peace, Love and Little Donuts chain, left a federal court hearing Thursday with a sentence of probation instead of prison for hiding his doughnut business from bankruptcy court and cheating on his income taxes.
With some 30 Razete supporters packed into her courtroom, U.S. District Judge Donetta Ambrose imposed a term of five years of probation and ordered him to perform 300 hours of community service. He had faced a potential jail term of 10 to 16 months.
The judge made it clear she was not taking the case lightly. She said she wanted to “disabuse” anyone of thinking that the prosecution was simply a matter of “accounting issues,” as some of Razete’s supporters have insisted, that have since been cleared up.
“It’s not about ‘accounting issues,’” she told the audience. “It’s about lying, cheating and greed.”
But she agreed with Razete’s lawyer, Laura Gutnick, that sending him to prison would serve no purpose, especially because he has already paid $40,350 in restitution to the IRS. Ms. Gutnick said he employs lots of people, is needed to run the three shops he owns and has to be on-site to help set up other franchises across the U.S.
Judge Ambrose said jail “just doesn’t make sense” for someone like Razete, who she said is no threat to anyone.
Razete refused to comment after the hearing. He hugged his friends and family in a courthouse atrium.
In court, he said only that he felt “remorse and embarrassment” for what he’d done and that his life has been greatly affected since the day this summer when he pleaded guilty and became a federal felon twice over.
Assistant U.S. Attorney Greg Melucci had argued that Razete’s crimes were calculated and that he repeatedly lied to hide his assets despite having ample opportunity to set the record straight. Mr. Melucci said he then made matters worse by also lying to the IRS about his income taxes.
The lies were all the more troubling, Mr. Melucci said, considering his history as a religious man. Razete had been an ordained minister until he was defrocked because of his criminal actions.
“He fell prey to temptation,” Mr. Melucci said.
Razete, 56, a father of five who lives in Moon, pleaded in June to filing a false income tax return and concealing assets and his business.
The tax charge relates to 2010, when he said he earned $16,000 while really bringing in about $194,000. He also admitted that he hid income from the doughnut company in a Chapter 7 bankruptcy filing in 2011.
Razete and his wife, Marci, founded Peace, Love and Little Donuts in 2009. The company has since expanded to include more than 20 other franchises in Pennsylvania, Ohio, Florida and Utah.
Prosecutors said Razete did not reveal the existence of the company in disclosure statements that he and his wife entered as part of the bankruptcy filing, despite the fact that the business and Razete had been the subject of news articles in the Post-Gazette and other outlets.
Razete had attracted attention because his company advertised itself as a hippie-inspired business while he railed online against President Barack Obama, gays and abortion.
Torsten Ove: tove@post-gazette.com or 412-944-6551.
First Published: December 8, 2016, 5:34 p.m.
Updated: December 9, 2016, 5:21 a.m.
