Owner Of Defunct Bar Running Successful Cigar Lounge

SACRAMENTO (CBS13) -- One of the co-owners of a popular midtown bar faced the wrath of his former employees last week when they found out the business was closing due to financial troubles, and he freely admitted he was broke and couldn't even afford to give workers their final paycheck.

When CBS13 showed up to his apparently thriving cigar lounge Monday, he wasn't interested in talking anymore.

In an interview last Wednesday, Hangar 17 co-owner Joey Madrid said their bar owed the IRS more than $500,000 in back taxes and couldn't afford to keep their doors open.

"2005, 2006 we started having tax problems," Madrid said.

Madrid claimed there was no money left to give his employees their final week of wages and that he had sunk all of his own money into the business. He even said he had to find a job to support himself.

"I've lost two homes and two cars in this business," he said. "I feel bad about it. There's nothing I can do."

Workers were enraged when told they wouldn't get their final paychecks; some took the bar's leftover food and liquor, and others made threats toward the owners.

"There's about 15 employees there that all got shorted," said former Hangar 17 cook Manuel Quinones. "I thought he was a better person than that and obviously he's not."

CBS13 learned Madrid owns what appears to be a thriving cigar smoking lounge in Sacramento, Fat Man Cigars. As soon as our cameras showed up to the business Monday, they closed their doors and locked up, even shutting out customers.

Madrid's car was parked outside the business, but nobody answered requests for comment on whether Hangar 17's former employees would receive back wages.

The IRS says no regulations would prevent Madrid from starting another corporation just because another of his businesses owes back taxes.

Some of Hangar 17's former employees are considering picketing Madrid's new business.