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Exclusive: Owners Of Landmark Florida Beach Restaurant Under US Tax Evasion Investigation

Hurricane Oyster Bar and Grill, a popular seafood restaurant known by its acronym “HOBAG” located between Panama City Beach and Pensacola on Florida’s gulf coast, is seen on February 29, 2020. Its owners, David and Kellie Biegler, are accused of failing to pay payroll taxes and failing to file personal or corporate income taxes for more than 10 years. (Melissa Hernandez/Fresh Take Florida)
Hurricane Oyster Bar and Grill, a popular seafood restaurant known by its acronym “HOBAG” located between Panama City Beach and Pensacola on Florida’s gulf coast, is seen on February 29, 2020. Its owners, David and Kellie Biegler, are accused of failing to pay payroll taxes and failing to file personal or corporate income taxes for more than 10 years. (Melissa Hernandez/Fresh Take Florida)

Owners of a landmark seafood restaurant in Florida’s Panhandle are under criminal investigation in a major tax fraud case, according to court records. 

David and Kellie Biegler, owners of Hurricane Oyster Bar and Grill in Santa Rosa, on Florida’s Gulf coast between Panama City and Pensacola, are accused of failing to pay payroll and other taxes on more than $4 million in wages for hundreds of employees and failing to file personal or corporate income tax returns for more than 10 years.

Federal agents raided the restaurant on Nov. 13, according to witnesses and federal court filings. At nearly the same moment, on the same day, agents also raided the restaurant owners’ single-story brick home, less than five miles away.

The restaurant – with nearly three dozen current employees – is an enormously popular spot on Florida’s so-called Emerald Coast, named for the Gulf of Mexico’s stunning green waters there.

Court records said the Bieglers and their company, Biegcorp Inc., have been under investigation for at least one year on suspicion of tax evasion and willful failure to collect or pay over taxes. Both are federal felony charges that can carry fines up to $500,000 and prison terms of five years.

If the government’s suspicions were true, it would indicate the Bieglers never submitted payroll taxes and Medicare and Social Security payments for the restaurant’s employees since at least 2010 – meaning they wouldn’t be credited for the money already deducted from their paychecks.

The IRS estimated the missing amount at $1.4 million for nearly 300 employees.

Copies of the 22-page search warrant applications and related legal paperwork were obtained by Fresh Take Florida, a news service operated by University of Florida College of Journalism and Communications. Prosecutors filed them in federal court under case numbers and names with no obvious references to the restaurant or its owners.

At the restaurant, on a Wednesday mid-morning, federal agents in body armor and armed with assault rifles seized boxes of payroll logs, sales summaries, invoices, deposit slips, employee files, IRS correspondence and a pay stub for Biegler. They also made copies of at least five computer hard drives and two smart phones discovered. In a trash bin beneath an office desk, discarded tax forms were found. 

Then, for over five hours, IRS agents also rummaged through the couple’s home office, garage, kitchen, bedroom and attic, court records said. They seized bank statements, tax and business records, handwritten notes, tax forms, at least five computers and a smart phone – along with a list of secret passwords – and copied a 1-terabyte hard drive. Paperwork seized included correspondences with the IRS. For at least a month last summer, federal agents secretly recorded every piece of mail delivered to the Bieglers’ home, court records showed.

Biegler was at the restaurant, not at his home, during the November raids, according to witnesses and court records. Agents said they left a copy of their search warrant on the kitchen counter signed by U.S. Magistrate Judge Charles Kahn Jr. of the U.S. District Court for the Northern District of Florida, along with a list of items confiscated.

Complex tax investigations can take months or even years to unravel. No criminal charges have been filed against the Bieglers yet. Mrs. Biegler said her husband was working with the IRS on the matter. 

The lead IRS agent on the case, Scott Schneider, acknowledged in an interview that the investigation was active and that the affidavits were never supposed to be included in court files. Schneider, who works for the IRS criminal investigation division, said he could provide more details about the case when the Bieglers were indicted or settled the criminal charges.

The office of U.S. Attorney Lawrence Keefe declined to comment except to say it could not confirm any investigation.

Biegler did not respond to eight phone messages, emails and texts over 10 days from this reporter asking to discuss the case. 

Mrs. Biegler said she was unaware she had ever been the subject of a criminal investigation. She said she was innocent, separated from Biegler and planning to divorce him since before the IRS raids. She said her estranged husband filed the couple’s tax returns.

“I know nothing about anything because I wasn’t involved,” she said. “We are a good family with a good reputation in the community. We are good people and lawful citizens.”

It also was not immediately clear whether the investigation includes the Bieglers’ daughter, Karlie Biegler. She is a recent Florida State University graduate and said on her resume she has been in charge of bookkeeping and payroll as assistant manager at her parent’s restaurant since January 2015. She has been earning her master’s degree in international business from the University of Florida since January, and school records show her enrolled as a student. 

Mrs. Biegler said Karlie was only a waitress at the restaurant during summers home from college. The online resume was deleted from the internet after Fresh Take Florida began asking questions about the daughter’s role at the restaurant.

Karlie Biegler did not respond to emails and a message sent through her social media account over eight days.

Employees at the restaurant – including some who witnessed the IRS raid – said the tax investigation was no surprise. 

David Fillingim, 43, said he received a letter from the IRS in May saying he owed $39,158 in overdue taxes between 2011 and 2018. He said he was a server there since 2011 until he was fired March 5 for discussing the tax investigation with vendors.

“We all feel stupid, we all feel dumb,” Fillingim said. “We always got the vibe that he did not care about us at all. He just got away with it for years.”

Fillingim said the restaurant used “Biegcorp, Inc.” as its payroll servicer and employees were issued checks showing hourly wages of 1 cent. He said when he and other employees confronted Biegler, the owner explained they were paid almost entirely in tips and that the amounts listed as wages went toward taxes.

When another restaurant employee objected that Biegler had failed to make Social Security payments on her behalf over eight years, Biegler left a profane voicemail for her husband offering $10,000 to account for the lost benefits, according to the voicemail provided to Fresh Take Florida. Biegler never paid the $10,000, said the employee, who spoke on condition of anonymity because she said her husband’s new employer did not want the couple discussing the incident.

“What I’m going to do is write you all a goddamn check, and she can take this little $10,000 check of Social Security and she can put it in a bank account and she can let it grow and then this all gets f---ing worked out,” Biegler said. “And you all can take that $10,000 and shove it up your a----.”

The landmark restaurant – sometimes known by its “HOBAG” acronym – closed last week due  to the recent pandemic. Mrs. Biegler said it was unclear whether the restaurant would reopen due to the virus and lost business.

Days before the raid on the Bieglers’ home, IRS special agent Wendy Kay Kilpatrick said investigators secretly visited the restaurant on Halloween and watched waitstaff and bartenders working under the direction of manager David Phillips.

The restaurant’s Facebook and Instagram accounts show a bustling business, advertising food and drink specials, as well as events, such as a gumbo cookoff. Customers describe its food in online reviews as “the best oyster place in the Panhandle,” with sometimes lengthy wait times for a table of up to three hours or more. 

Federal agents told the magistrate they wanted to seize ledgers or receipts showing sales or revenues to help build the criminal case against the Bieglers.

“Their receipt of income from any source … is relevant to any income tax violations concerning their failure to report income on their personal income tax returns,” Kilpatrick told the magistrate.

The court records do not describe any motive in what agents said was the Bieglers’ failure to pay taxes. In July 2018, Biegler was found guilty on felony narcotics charges in nearby Okaloosa County and placed on probation until last month, according to state court records. He paid $500 to avoid working 50 hours of community service.

Biegler also worked in real estate in the region specializing in sales of luxury beachfront homes. Until the Fresh Take Florida investigation, he was listed as a listing and buying specialist at Coastal Luxury, a boutique real estate firm in nearby Seacrest that called Biegler well respected and a long time local leader. The firm’s owner, Erin Oden, said Tuesday that Biegler was "not associated with our company," after originally declining to say whether Biegler was still working there.


This story was produced by Fresh Take Florida, a news service of the University of Florida College of Journalism and Communications. The reporter can be reached at mhernandez@freshtakeflorida.com.

Melissa is a reporter for WUFT News who can be reached by emailing news@wuft.org or calling 352-392-6397.