Federal courts found Montgomery Township woman guilty of perpetrating fraud
A North Wales woman who owned an Ambler restaurant has been sentenced in federal court for perpetrating fraud in the Paycheck Protection Program which assisted small businesses during the COVID pandemic.
U.S. Attorney Jacqueline C. Romero announced that Giuseppina “Josephine” Leone, 62, of Montgomery Township, was sentenced Tuesday by U.S. District Court Judge Gerald A. McHugh to 21 months in prison, one year of supervised release, a $50,000 fine and $300 special assessment for pandemic program fraud. The defendant also paid full restitution in the amount of $972,861.75.
Leone was charged by indictment on May 16, 2024, with three counts of wire fraud for making false representations in documents relating to the Paycheck Protection Program and Restaurant Revitalization Fund program, which provided emergency financial assistance to business owners suffering the economic effects of the COVID-19 pandemic. She pleaded guilty to those charges on May 23.
According to court records, Leone and her husband were owners of Ristorante San Marco, an Italian restaurant in Ambler. Leone and her husband executed an Agreement for Sale of Real Property dated October 20, 2019, listing themselves as the “Sellers” of the restaurant 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 the restaurant would be temporarily closed due to the COVID-19 pandemic. It remained closed and never reopened.
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 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 later that month. The loan was subsequently forgiven based on further misrepresentations by Leone, according to court records.
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 the restaurant’s bank account in February 2021. Again, the PPP loan was forgiven due to misrepresentations by Leone, court records state.
Finally, Leone defrauded another COVID-19 relief program. While Ristorante San Marco 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 misrepresented that Ristorante San Marco, 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 later in May 2021, according to court records.
One month later, in June 2021, Leone closed on the sale of the restaurant. Nonetheless, over a year later, Leone misrepresented to the federal government that the RRF funds had been used for eligible purposes, even though Ristorante San Marco was never reopened by Leone, court records state.
“PPP and the other covid relief programs were meant to provide emergency aid to businesses and employees financially flattened by the pandemic,” said U.S. Attorney Romero. “My office and our partners won’t stand for opportunists like Mrs. Leone thinking they can defraud the federal government, pocket taxpayers’ money, and get away with it. We’ll continue to aggressively pursue and prosecute anyone foolish enough to do so.”
The case was investigated by the Small Business Administration Office of Inspector General, the FBI, and Homeland Security Investigations, and prosecuted by Assistant United States Attorney Angella Middleton.
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