California Restaurant Owner Convicted of Tax and COVID-19 Fraud Schemes

A federal jury in San Diego convicted a California man yesterday of wire fraud, conspiracy and tax crimes for schemes to defraud COVID-19 relief programs and to file false tax returns.

According to court documents and evidence presented at trial, Leronce Suel was the majority owner of Rockstar Dough LLC and Chicken Feed LLC, both of which operated restaurants in the San Diego area, including Streetcar Merchants in the North Park neighborhood. He conspired with others to underreport over $1.7 million in gross receipts on Rockstar Dough’s 2020 corporate tax return and COVID-19 relief applications. Suel’s businesses fraudulently received $1,773,245 million in COVID-related Paycheck Protection Program loans and Restaurant Revitalization Fund grants, two programs created to provide financial assistance to Americans suffering economic harm as a result of the COVID-19 pandemic. Suel and his co-conspirator misappropriated COVID-19 relief program funds by making substantial cash withdrawals from their business bank accounts, purchasing a home in Arkansas and keeping more than $2.4 million in cash in his bedroom.

Suel did not file timely tax returns for 2018 and 2019, despite being legally required to do so. In addition, during the period 2020 through 2022, Suel did not file personal returns that reported flow through income from his businesses and personal income he received from his business, including millions of dollars in cash he withdrew. In 2023, Suel filed false original and amended tax returns for several years, including personal returns for 2016 and 2017 that included false depreciable assets and business losses.

In total, Suel caused a tax loss to the IRS of $1,292,976.

Suel was convicted of wire fraud, conspiracy to commit wire fraud, tax evasion, conspiracy to defraud the United States, filing false tax returns and failing to file tax returns. He was acquitted of the money laundering charges.

Following the convictions, Suel agreed to forfeit $1,466,918 in U.S. currency.

Suel is scheduled to be sentenced on Dec. 13. He faces a maximum penalty of 30 years in prison for each count of wire fraud and conspiracy to commit wire fraud, a maximum penalty of five years in prison for tax evasion and conspiracy to defraud the United States, a maximum penalty of three years in prison for each count of filing false tax returns and a maximum penalty of one year in prison for each count of failing to file tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Tara K. McGrath for the Southern District of California made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorney Julia Rugg of the Justice Department’s Tax Division and Assistant U.S. Attorney Christopher Beeler for the Southern District of California are prosecuting the case.

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Source: Justice.gov