Former Ambler restaurant owner charged with COVID relief loan fraud
PHILADELPHIA — A former Montgomery County restaurant owner is facing fraud-related charges in federal court in connection with her alleged misuse of COVID-19 relief funds that provided financial assistance to business owners during the pandemic.
Giuseppina “Josephine” Leone, 61, of North Wales, who owned an Ambler restaurant, was indicted in U.S. District Court in Philadelphia on three counts of wire fraud for allegedly making false representations in documents relating to the federal Paycheck Protection Program and Restaurant Revitalization Fund, which provided emergency financial assistance to business owners suffering the economic effects of the COVID-19 pandemic.
U.S. Attorney Jacqueline C. Romero announced the indictment on Friday.
According to the indictment, Leone and her husband were owners of Ristorante San Marco, an Italian restaurant located in Ambler.
Leone and her husband executed an agreement for sale of real property on Oct. 20, 2019, listing themselves as “Sellers” of the restaurant property and a third party as the “Buyer” for a purchase price of $1,575,000, according to federal prosecutors. Subsequently, on or about March 18, 2020, Leone posted on the restaurant’s Facebook page, informing the public that the restaurant would be temporarily closed due to the COVID-19 pandemic. The restaurant remained closed and never reopened, authorities alleged.
The indictment alleged that despite the restaurant not being in operation in April 2020, Leone submitted a fraudulent application for a Paycheck Protection Program loan in the amount of $138,000. The application misrepresented that the restaurant, which had been closed for approximately a month, had 17 employees, and would use the loan for payroll and other operating expenses.
The fraudulent application was approved, and the loan funds were deposited into the restaurant’s bank account later that month, federal prosecutors alleged. The loan was subsequently forgiven based on further misrepresentations by Leone, according to the indictment.
In January 2021, while the restaurant still was not operating, Leone allegedly submitted another fraudulent application for a Paycheck Protection Program loan, this time seeking $120,000. The application made similar misrepresentations and was approved, resulting in the requested funds being deposited in the restaurant’s bank account in February 2021. Again, the loan was forgiven due to misrepresentations by Leone, federal authorities alleged.
Leone is accused of defrauding a second COVID-19 relief program, specifically, the Restaurant Revitalization Fund.
While the restaurant was still not in operation in May 2021, Leone allegedly submitted a fraudulent application for a grant under that program, requesting $699,196 for restaurant operations. That application mispresented that the restaurant, which had not been operating since March 2020, was in operation and that the money would be used to pay employee wages, according to the indictment.
As a result of the alleged deception, the request was approved, and the funds were deposited in the restaurant’s bank account in May 2021. One month later, in June 2021, Leone closed on the sale of the restaurant, authorities alleged. Nonetheless, over a year later, Leone misrepresented to the federal government that the Restaurant Revitalization Fund monies had been used for eligible purposes, even though the restaurant was never reopened by Leone, according to the indictment.
If convicted of the fraud charges, Leone faces a maximum possible sentence of 20 years in prison for each count and a total fine of $750,000. Leone also will be required to forfeit all proceeds received as a result of the alleged fraud, including, but not limited to, the sum of $957,196.
The case was investigated by the Small Business Administration Office of Inspector General, the Federal Bureau of Investigation and Homeland Security Investigations.
Assistant U.S. Attorney Angella Middleton is prosecuting the case.
View more on Mainline Media News