Former Montgomery County Restaurant Owner Charged with PPP and RRF Loan Fraud (May 17, 2024)

Summary

A press release published May 17, 2024, with a Philadelphia dateline, states that United States Attorney Jacqueline C. Romero announced that Giuseppina "Josephine" Leone was charged by indictment with three counts of wire fraud for making false representations in documents relating to the Paycheck Protection Program (PPP) and Restaurant Revitalization Fund (RRF) program. The indictment alleges PPP loan applications for Ristorante San Marco seeking $138,000 in April 2020 and $120,000 in January 2021, and an RRF grant application requesting $699,196 in May 2021. The release says that, if convicted, the defendant faces a maximum possible sentence of 20 years in prison for each count and a total fine of $750,000, and must forfeit proceeds including $957,196.

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PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Giuseppina “Josephine” Leone, 61, of North Wales, PA, was charged by indictment with three counts of wire fraud for making false representations in documents relating to the Paycheck Protection Program (“PPP”) and Restaurant Revitalization Fund (“RRF”) program, which provided emergency financial assistance to business owners suffering the economic effects of the COVID-19 pandemic.
The indictment alleges that Leone and her husband were owners of Ristorante San Marco (“RSM”), an Italian restaurant located in Ambler, PA. Leone and her husband executed an Agreement for Sale of Real Property dated October 20, 2019, listing themselves as the “Sellers” of the RSM property and a third party as the “Buyer” for a purchase price of $1,575,000. Subsequently, on or about March 18, 2020, Leone posted on the restaurant’s Facebook page informing the public that RSM would be temporarily closed due to the COVID-19 pandemic. RSM remained closed 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. This application misrepresented that RSM, 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 RSM’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 RSM’s bank account in February 2021. Again, the PPP loan was forgiven due to misrepresentations by Leone.
Finally, Leone defrauded another COVID-19 relief program. While RSM was still not in operation in May 2021, Leone submitted a fraudulent application for a grant under the RRF program, requesting $699,196 for restaurant operations. This RRF application mispresented that RSM , 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 RSM’s bank account later in May 2021. One month later, in June 2021, Leone closed on the sale of RSM. Nonetheless, over a year later, Leone misrepresented to the federal government that the RRF funds had been used for eligible purposes, even though RSM was never reopened by Leone.
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.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

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