A Connecticut restaurant and lounge owner who admitted to defrauding pandemic relief programs for over $750,000 has been sentenced to over a year in federal prison.
Omar Rajeh, 57, of Hamden, was sentenced by U.S. District Judge Stefan R. Underhill in Bridgeport to 15 months in prison followed by two years of supervised release after pleading guilty to one count of wire fraud and one count of engaging in illegal monetary transactions on Dec. 20, 2023, according to the U.S. Attorney’s Office. Underhill also ordered him to pay a $2,000 fine.
“In March 2020, the Coronavirus Aid, Relief, and Economic Security Act provided emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of forgivable loans to small businesses for job retention and certain other expenses through the Paycheck Protection Program,” the U.S. Attorney’s Office said.
“The PPP was overseen by the U.S. Small Business Administration, and individual PPP loans were issued by private lenders, which received and processed PPP applications and supporting documentation, and then made loans using the lenders’ own funds, which were guaranteed by the SBA. A second source of relief provided by the CARES Act was the distribution of Economic Injury Disaster Loans, through the SBA, which provided working capital to eligible small businesses to meet operating expenses.”
According to court records, Rajeh owned or had management interest in Mediterranea LLC, New Haven restaurant, and M. Café Inc., a hookah lounge. Court records show that Rajeh previously operated his restaurant under the name Al Amir LLC, which was dissolved in 2018.
Federal officials claimed that Al Amir LLC was re-registered with the state of Connecticut in July 2020 in order to apply for pandemic loan funding. Between June 2020 and May 2021, Al Amir LLC, Mediterranea LLC, and M. Café Inc., reportedly applied for and received $1,057,244 in PPP and EIDL funding, according to court records.
“Rajeh’s accountant, Yasir Hamed, prepared financial filings for his various entities and was involved in the preparation of fraudulent paperwork to obtain the funding,” court records show. “The loan applications fraudulently misrepresented that Al Amir LLC was in operation in February 2020; included false employee, monthly payroll, and business revenue information; included copies of false IRS forms; and contained other false information.”
According to court records, Rajeh used a majority of the funds for personal and family expenses, including purchasing a property in North Haven, and for general business expenses. He also allegedly kicked back approximately 10% of the loan funding to Hamed.
The U.S. Attorney’s Office said Rajeh agreed to pay $758,279 in restitution, which reflects the amount he admits was obtained by fraud. “The government has agreed not to pursue the return of $298,965 in PPP funds that Rajeh received for his true restaurant business,” according to the U.S. Attorney’s Office.
Rajeh is required to report to prison on Oct. 1.
Hamed pleaded guilty to related charges on May 9 and is awaiting sentencing.
