In 2016, World Famous Chicken & Waffles—formerly known as Gladys Knight’s Chicken and Waffles—was shut down by the Georgia Department of Revenue and had its registration revoked due to tax issues. The restaurant was owned by Shanga Hankerson, son of Gladys Knight and Barry Hankerson.
Shanga reportedly took in a total of $650,000 in state sales and withheld taxes, according to Fox 5 Atlanta. The 45-year-old pleaded guilty in July of 2021 and, as of Friday (Nov. 5), was sentenced to two years in prison and one year of supervised release for willful failure to remit payroll taxes. He was also ordered to pay over $1 million in restitution.
As stated in the information presented in court, Shanga started the small chain in 1997 and expanded to other locations in northern Georgia and Washington, D.C. As the sole owner of the restaurant chain, he and his company were required to withhold various payroll taxes, including taxes for Social Security and Medicare. However, prosecutors state that he failed to fully remit over $1 million in owed payroll taxes from at least 2012 through 2016.
IRS Criminal Investigation Special Agent in Charge James E. Dorsey, stated, “While ownership of a well-known restaurant in our community has its perks, it also comes with great responsibility. Paying taxes is a way to give back to the community, but unfortunately, Hankerson chose to use those funds for other means. This sentencing emphasizes that all employers, big and small, have equal responsibility to collect, report, and pay over their payroll taxes.”
“Hankerson willfully disregarded his tax obligations for many years,” said Acting U.S. Attorney Kurt R. Erskine in an emailed statement to The Atlanta Journal-Constitution. “Payroll taxes fund social insurance programs, including Social Security and Medicare, and are a large source of revenue for the federal government. Employers who fail to comply with their legal obligations will be held accountable.”
When Shanga was first arrested in 2016, his employees told investigators he spent the money on sex parties and marijuana. Knight sued her son to remove her name and likeness from being associated with the restaurants.
The case remains under investigation by the Internal Revenue Service Criminal Investigation.
