Two San Diego restaurant owners indicted for COVID-19 relief fund fraud by a federal grand jury, following an alleged conspiracy to manipulate applications for COVID-19 relief funds. Leronce Suel, 46, and Ravae Smith, 45, who own Rockstar Dough and Chicken Feed, are accused of underreporting over $1.7 million on tax forms and falsifying information to qualify for the Paycheck Protection Program (PPP) and Restaurant Revitalization Funding loans, established during the pandemic.
The indictment further reveals that Suel and Smith, who also own other San Diego restaurants such as StreetCar Merchants Chicken Bar, Shotcaller Street Soul Food, and the now-closed Suckerfree Southern Plate & Bar, misrepresented how the funds would be utilized in their loan applications. Additionally, they are alleged to have made substantial cash withdrawals from their business bank accounts to launder the fraudulently obtained funds. Furthermore, authorities claim that the couple concealed over $2.4 million in cash at their residence.
U.S. Attorney Randy Grossman stated in a press release, “During an unprecedented public health emergency, the United States provided these loan programs to deliver economic relief to Americans. This office will investigate and prosecute those who exploited the global pandemic to unjustly enrich themselves.”
John Gordon, principal of Pacific Management Consulting Group, acknowledged the significance of COVID-19 relief programs for businesses during the early stages of the pandemic. He noted that while many local restaurants continue to face financial challenges due to inflation and supply chain issues, such circumstances do not excuse operators from engaging in fraudulent activities to secure PPP funds. However, Gordon expressed confidence that these isolated incidents would not adversely impact future funding programs, as the government anticipated the possibility of misuse. He added that the detection of such cases demonstrates the effectiveness of oversight measures.
The Paycheck Protection Program, backed by the U.S. Small Business Administration, was launched at the onset of the pandemic to assist businesses in retaining their employees and covering essential expenses. Over two funding rounds, the government authorized more than $600 billion in forgivable loans to support small businesses.
The Restaurant Revitalization Fund aimed to aid local establishments and offered funding up to $10 million per business, based on pandemic-related revenue loss, with a maximum of $5 million per physical location. The funds did not require repayment if used for eligible expenses within the specified timeframe.
According to the ProPublica database, Rockstar Dough received an $82,850 PPP loan that was forgiven, along with a $105,728 loan in the second round. Chicken Feed also received a forgivable loan amounting to $142,345, as well as a $181,455 PPP loan. Data from the SBA reveals that Chicken Feed obtained $734,867 from the Restaurant Revitalization Fund, while Rockstar Dough received $526,000.
Suel and Smith made their initial court appearance before U.S. Magistrate Judge William V. Gallo on May 23, as legal proceedings commence.
Also Check Florida News : Feds Take Action Against Florida Restaurant for Stealing Servers’ Tips