A Restaurant Named Filiberto’s

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In the middle of mid-town, the once quintessential lavish 1970’s resort area of the city of Tucson, Arizona, nestled between the drug infested Mall Of The Homeless and the iconic 1960’s bar a block away, lies a small Mexican restaurant named Filiberto’s. A small homely feeling place where all of the staff greet you with large smiles and an equally large “hello!”

While the raft of riff that encompasses the neighborhood could be seen as an unpleasant sight, inside the restaurant, the staff don’t even notice, carrying on with happy faces, smiles and a seemingly uncanny ability to not even know what is around them on the outside. With a large selection on the menu and good portions, it is easy to see why this small local spot is a favorite.

Filiberto’s began it’s roots in the small town of Santo Domingo, Mexico. It sits off a winding two lane mountain highway in the state of San Luis Potosí in central Mexico, on almost the same latitude as the coastal resort city of Mazatlán but about a nine hour drive inland. A small municipality of maybe 700 or so people, with little to see from the highway but a modest school and a few roadside refresquerías selling Coca-Cola.

Like a lot of small towns in the southwest area of the US and Mexico, this one was to be no different. It was the Filiberto family that built it. In Santo Domingo, people know Filiberto as a local boxing promoter and one of the four elder Tenorio-Quintero brothers, along with Flavio, Aurelio and Francisco, responsible for keeping their town alive.

In an ironic twist, while the Tenorios started their business in America, opening their first restaurant in Mesa, Arizona in 1993, it was their habit of hiring workers from their hometown that ultimately landed the brothers back in Santo Domingo.

For the past 20 years, the Tenorios have been running their empire from this tiny town, the result of a tangled legal drama involving the US Immigration and Naturalization Service and some unscrupulous California lawyers that ended in the deportation of three out of the four brothers, with the fourth joining his siblings on his own.

Following a sting, the four Tenorio brothers pleaded guilty in federal district court to one count of conspiracy to engage in a “pattern and practice of hiring unauthorized aliens” and one count of “deceiving and defrauding the Internal Revenue Service in the assessment of taxes,” as they had ignored paying taxes on the licensing fees they accepted from individual store operators to use the Filiberto’s name.

As part of a plea agreement, the brothers, along with the managers at 17 Filiberto’s restaurants, agreed to pay all back taxes to the IRS in addition to a 1.9 million dollar fine, which at the time was called the biggest fine for a worksite enforcement case in US history.

On top of this hefty fine, each of the Tenorio brothers were sentenced to 13 months in prison. But first, in an unusual ruling by senior US District Judge Stephen McNamee, they were allowed to go back to Mexico to get their affairs in order.

No one thought they would come back to serve their time. But they did, being the result of them getting involved with a lawyer in Los Angeles named Mansfield Collins, who wasn’t even an immigration lawyer, but he told them, “I’m going to win this case and you’ll be able to stay in the country.” But they never stood a chance of winning. After they got released from jail, they were deported back to Mexico.

By then, the brothers had amassed over a quarter million dollars in attorney fees along with the criminal fines and tax debt. Before they left the US, Collins introduced the brothers to Ivania Piskulich, a tax preparer in Los Angeles, who said she had formed a company named LEASCO Inc. that would pay their attorney fees, criminal fines and IRS debt if the Tenorios agreed to sell their restaurants’ trademark and trade name to her.

In desperation, they agreed to the arrangement. From 1998 to 2002, anyone who wanted to open a Filiberto’s franchise had to pay a licensing fee to the Los Angeles based entity, which also took over management of some key properties.

Collins and Piskulich never paid the brothers anything on those licensing fees. Collins claiming that all of the money they were collecting was going to pay their legal fees. In the meantime, Collins and Piskulich were living the high life off of the royalties.

Unfortunately for the lawyers, neither of them knew how to run a restaurant. One of the locations in Tucson, Arizona in their care went from grossing 200,000 per month to less than 100,000 in a short matter of time. By 2003, LEASCO applied for Chapter 11 bankruptcy in Arizona.

Today, Filiberto’s is one of the more successful fast food chains in Arizona. Even though it’s not accredited by the Better Business Bureau and goes virtually ignored by the Phoenix Business Journal. The chain’s average unit volume runs in the 500,000 to 1 million range.

Despite all of this devastation to the family, the restaurant itself has continued to thrive, presided over by the naturalized sons, daughters and grandchildren of the founders. In 2011, with reported sales for the year totaling 29.5 million. Filiberto’s even earned a coveted spot on Restaurant Business’ annual Future 50 ranking, coming in at 23rd, just behind powerhouse chains Shake Shack, Zoës Kitchen and Eddie V’s.

As well, the chain now boast an impressive fifty-five locations scattered throughout Arizona, New Mexico and California. But their drive and enthusiasm wouldn’t stop there. The company wanted to show their appreciation for the support the community showed them by making many long lasting commitments by becoming a dedicated supporter of St. Jude Children’s Hospital and community youth athletics. A feat that is not always shown by the larger restaurant chains.

More impressive is that you won’t catch Filiberto or any of the other Tenorio brothers rubbing elbows with fellow Arizona business magnates at swank Phoenix luncheons, despite the chain’s success, besting many more high profile local businesses.

Back in Santo Domingo at the annual fair and religious celebrations, the banished burrito brothers, now in their 50s and 60s, are royalty.

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