United States Attorney Freedman Announces First-Ever Settlement … – Department of Justice

ALBANY, NEW YORK Feast American Diners LLC and Dawood David Beshay, the corporate owner and managing member of multiple Dennys restaurants throughout Arizona and New York, including locations in Syracuse, Auburn, Camillus, Cicero, and Watertown, will pay $2 million to resolve allegations that Beshay falsely certified that Feast American Diners was eligible for a Restaurant Revitalization Fund (RRF) grant when he knew or should have known that his company owned and operated too many locations to qualify for the funding, announced United States Attorney Carla B. Freedman.

United States Attorney Freedman stated: The Restaurant Revitalization Fund was meant to provide a financial lifeline to restaurants and other eligible entities that were struggling to stay afloat during the COVID-19 pandemic. Feast American Diners and Dawood Beshay are paying a steep price for falsely certifying their eligibility for these funds.

Congress enacted the American Rescue Plan Act, in March 2021, as a continuation of the federal governments efforts to provide relief to American individuals and businesses suffering the economic and public health effects of the pandemic. The Act allocated $28.6 billion toward an RRF, to be administered by the United States Small Business Administration (SBA), that could grant qualifying restaurants and other eligible entities monetary awards equal to revenue losses caused by the pandemic. Any restaurant that owned or operated more than 20 locations as of March 13, 2020 was not eligible for an RRF grant.

In April 2021, SBA released guidelines for completing RRF applications. The guidance reiterated that an entity was not an eligible entity if it owned or operated more than 20 locations as of March 13, 2020. At various points throughout the guidance, SBA explained that a restaurant was in operation if it was making sales.

In the settlement agreement, Feast American Diners and Beshay admit, acknowledge, and accept responsibility for the following facts: In May 2021, Beshay applied for an RRF grant on behalf of Feast American Diners, in the amount of $928,554. One of the questions on the application asked whether Feast American Diners owned or operated more than 20 locations as of March 13, 2020, to which Feast American Diners responded no. That same question indicated that an applicant who responded yes would not be eligible for the grant. Later in the application, Beshay affixed his initials next to the following statement: The Applicant, together with its affiliates, does not own or operate more than 20 locations. In fact, Feast American Diners owned 21 Dennys locations as of March 13, 2020 and each of those locations made sales that day, facts that Beshay acknowledges that he should have known.

Those who provide false information for the purpose of receiving and retaining SBA program funds meant for eligible small businesses will be held accountable, said SBA Office of Inspector General (OIG) Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite. Todays settlement sends a strong message that those responsible will be brought to justice. I want to thank the U.S. Department of Justice and our law enforcement partners for their dedication and pursuit of justice.

The investigation began in December 2022, when a whistleblower filed a qui tam complaint under seal in the United States District Court for the Northern District of New York. When a whistleblower, or relator, files a qui tam complaint, the False Claims Act requires the United States to investigate the allegations and elect whether to intervene and take over the action or to decline to intervene and allow the relator to go forward with the litigation on behalf of the United States. The relator is generally able to then share in any recovery. Pursuant to the settlement agreement, the relator will receive $200,000 of the settlement.

The investigation and settlement were the result of a coordinated effort between the United States Attorneys Office for the Northern District of New York, SBA-OIG, and SBAs Office of General Counsel. The United States was represented by Assistant United States Attorney Adam J. Katz.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across the federal government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Departments response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justices National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Follow this link:

United States Attorney Freedman Announces First-Ever Settlement ... - Department of Justice