Owner of former Ambler restaurant charged with COVID-19 relief fraud

United States Attorney Jacqueline C. Romero announced on May 17th that Giuseppina “Josephine” Leone, 61, of North Wales, was charged by indictment with three counts of wire fraud for making false representations in documents relating to the Paycheck Protection Program (or PPP) and Restaurant Revitalization Fund ( or RRF) program, which offered emergency financial assistance to business owners impacted by the COVID-19 pandemic.

Leone owned the Ristorante San Marco restaurant at 504 North Bethlehem Pike in Ambler (Lower Gwynedd Township) since 1998 according to property records. The federal indictment alleges that Leone and her husband entered into an agreed to sell the property on October 20, 2019 for $1,575,000. Leone posted on Facebook on March 18, 2020, that the restaurant would be temporarily closed due to the pandemic and never reopened.

The indictment further alleges that despite the restaurant not being in operation in April 2020, Leone submitted a fraudulent application for a PPP loan in the amount of $138,000. According to the announcement, this 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 restaurant’s bank account later that month. The loan was subsequently forgiven based on further misrepresentations by Leone.

In January 2021, while the restaurant was still not in operation, Leone submitted another fraudulent application for a PPP loan, this time seeking $120,000. The application made similar misrepresentations and was approved, resulting in the requested funds being deposited into restaurant’s bank account in February 2021. This loan was also forgiven.

In addition to the charges involving the PPP program, Leone is also accused of defrauding the RRF COVID-19 relief program. While the restaurant was still not in operation in May 2021, Leone submitted a fraudulent application for a grant for this program requesting $699,196 for restaurant operations. This RRF 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. As a result of this deception, the request was approved, and the funds were deposited into the restaurant’s bank account later in May 2021. One month later, in June 2021, Leone closed on the sale of the property and restaurant. The following year, Leone is accused of misrepresenting to the federal government that the RRF funds had been used for eligible purposes, even though the restaurant had not reopened.

If convicted, the defendant faces a maximum possible sentence of 20 years in prison for each count and a total fine of $750,000. The defendant will also 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, and is being prosecuted by Assistant United States Attorney Angella Middleton.