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Credit: Courtesy Mark Cuddihee and WBIR-TV

When law enforcement arrested raw food restauranteur and 1994 College and Wharton graduate Sarma Melngailis, it was under the most ignominious of circumstances. The fugitive vegan, who disappeared after embezzling millions from her own business, had been caught because her accomplice had ordered a cheese pizza.

Police caught up with Melngailis and her husband and alleged accomplice Anthony Stringis on May 12 while they were hiding in Sevierville, Tenn. The couple had been on the run since last July.

She now awaits trial for grand larceny, criminal tax fraud and violation of New York state labor regulations after repeatedly failing to pay her employees. She faces up to 15 years in prison if convicted.

“These defendants are accused of repeatedly stealing from and lying to their loyal employees and to investors who poured money into their company,” Brooklyn District Attorney Ken Thompson said in a statement.

Melngailis, who graduated from Penn with an economics major in the College of Arts and Sciences and an accounting concentration in Wharton, opened Pure Food and Wine, an upscale raw food restaurant in New York City’s Gramercy Park neighborhood, in the summer of 2004, 10 years after graduating from Penn.

The restaurant was a financial and critical success, featured twice on New York Magazine’s “Top 100 Restaurants,” according to Pure Food and Wine’s website. Alec Baldwin reportedly met his wife there, according to the New York Post.

The business, now headquartered in Brooklyn as One Lucky Duck, has since expanded to include a second restaurant, two juice bars and a line of organic snacks, cosmetics and home products sold online.

Investigators at the Brooklyn district attorney’s office believe that the business began to fall apart around 2013, when she became involved with her current husband Anthony Stringis.

Beginning in January 2014, Melngailis and Stringis collectively withdrew over $1.6 million from her company’s bank accounts, much of which was spent on specialty watches, hotels and casinos in New York and Europe, the attorney’s office said in a May 12 press release.

Melngailis subsequently failed to pay her employees five times in 2014, and her company closed temporarily after workers left. The restaurant reopened in April 2015 after Melngailis raised $844,000 from investors, some of which she used to pay back private debts that she and Stringis had incurred.

“She’s the vegan Bernie Madoff,” Benjamin Dictor, an attorney representing some of Melngailis’ former employees told the New York Post last month.

Prosecutors believe that the couple continued to withdraw hundreds of thousands of dollars from the company’s accounts in order to pay back personal debts, including nearly $325,000 owed to various Connecticut casinos. Within months, Melngailis failed again to pay her employees. By the time the couple disappeared from New York in July, she owed over $40,000 to 89 employees, according to information released by the attorney’s office.

“They allegedly gambled away the money or spent it lavishly while leaving everyone else in the lurch,” Thompson said in a statement.

Shortly after her arrest, Melngailis told the New York Post that she was not angry at her husband, whose attorney has since accused Melngailis of being the mastermind of the entire thing.

“I worked hard, this was my passion,” Melngailis said. “This was all I ever wanted. Why would I throw it up in flames? Talk to my friends. They will tell you this is not me.”

At press time, Melngailis’ QuakerNet profile still listed “partner and president” of One Lucky Duck as her occupation. Her New York restaurant’s Yelp page says that it is closed permanently.

Prosecutors added that Melngailis’ business owes an additional $409,987.56 in unpaid sales taxes to the state of New York spanning most of the time she was involved with Stringis from January 2014 to July 2015.

Currently no trial date has been finalized for Melngailis or her husband.

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