Authorities said Sarma Melngailis spent the stolen $2 million on lavish vacations, luxury watches and trips to the casino

By Char Adams
Updated May 13, 2016 04:35 PM
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Sevier County Sheriff s Department (2)

Police say a former vegan restaurant owner who allegedly stiffed employees and stole about $2 million from investors to pay for lavish vacations and watches was tracked down and arrested after a Domino’s pizza delivery, PEOPLE confirms.

Sarma Melngailis, 43, and her husband, Anthony Strangis, 35, were arrested in Sevierville, Tennessee, on Tuesday after the order, a Sevierville Police Department spokesperson tells PEOPLE.

The New York couple allegedly spent a year on the run – authorities tracked them to Las Vegas, Louisiana and ultimately Tennessee – after allegedly defrauding investors, failing to pay more than $400,000 in sales taxes and shortchanging employees at Melngailis’ Pure Food & Wine and two other vegan companies, according to a statement obtained by PEOPLE from Brooklyn District Attorney Ken Thompson.

“They allegedly gambled away the money or spent it lavishly while leaving everyone in the lurch,” Thompson said in the statement. “They were finally caught and we intend to hold them accountable for this outrageous thievery and fraud.”

Pure Food & Wine once catered to the likes of Bill Clinton, Woody Harrelson and Gisele Bündchen, according to The Hollywood Reporter. The upscale spot also served as the place where Alec Baldwin famously met his wife Hilaria in 2011, according to the New York Times.

A raw food devotee, Melngailis cemented herself as somewhat of an authority on vegan eatery. The 43-year-old even penned two books devoted to vegan recipes. Raw Food, Real World was published in 2005 – a collaboration between Melngailis and celebrity chef Matthew Kenney. Melngailis’ second book, Living Raw Food, hit shelves in 2009.

According to the indictment, in one year’s time, the Melngailis and Strangis spent more than $1 million at casinos, more than $80,000 on Rolex and Beyer watches and over $70,000 at hotels in Europe and New York, Thompson said in the statement. He noted that they shelled out more than $10,000 for Uber car rides.

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The pair is charged with second-degree grand larceny, second-degree criminal tax fraud, first-degree scheme to defraud, violation of labor and other crimes in a 24-count indictment. If convicted of the top charge, the pair could face up to 15 years in prison.

Melngailis allegedly transferred more than $1.6 million from the business account into her personal account in 2014 and was afterward unable to pay employees for at least five months. However, she threatened to fire anyone who refused to work.

Melngailis and Strangis are accused of defrauding 84 workers up to $3,500 each for a total of over $40,000, Thompson said in the statement. Four investors allegedly gave Melngailis more than $800,000 after she told them she needed the cash to help her mother.

Instead, she allegedly used the money to pay back some former employees. She then allegedly told investors that she was planning to sell the business to a wealthy man named “Michael Caledonia” and had Strangis pose as the made-up businessman during a meeting last May.

Neither suspect has entered a plea because they have not yet been extradited back to New York, a spokesperson for Thompson’s office tells PEOPLE.