San Diego Restaurant Owner Convicted of COVID-Relief Fraud and Tax Crimes

Leronce Suel, a San Diego restaurant owner, was convicted of wire fraud, and underreporting over $1.7 million in revenue.Photo byJoshua ChehovonUnsplash

A federal jury convicted San Diego restaurant owner Leronce Suel of wire fraud, conspiracy, and tax crimes for defrauding COVID-19 relief programs and underreporting business revenue, the U.S. Attorney’s Office for the Southern District of California announced today.

Suel, 46, the majority owner of Rockstar Dough LLC and Chicken Feed LLC—companies that operated restaurants in the San Diego area, including Streetcar Merchants in North Park—was found guilty of underreporting more than $1.7 million in gross receipts on his business's 2020 corporate tax return.

"Shirking taxes, lying to the IRS, and stealing COVID relief funds are not victimless crimes," said U.S. Attorney Tara McGrath. "This jury saw through the greed and deceit and helped ensure federal programs are protected for those in need."

The jury also found that Suel fraudulently obtained approximately $1.77 million in Paycheck Protection Program (PPP) loans and Restaurant Revitalization Fund grants by submitting false certifications about his businesses' eligibility and intended use of the funds.

Instead of using the COVID-19 relief funds for legitimate business purposes, Suel and his co-conspirator withdrew large amounts of cash from their business accounts and purchased personal items, including a home in Arkansas.

Investigators later uncovered over $2.4 million in cash hidden in Suel's bedroom, funds that were tied to the fraudulent activity, the department says.

In addition to failing to report income, Suel filed original and amended tax returns that included false claims of business losses and inflated depreciable assets.

Tyler Hatcher, Special Agent in Charge of IRS Criminal Investigation's Los Angeles Field Office, added, "Suel not only evaded his tax responsibilities but also exploited pandemic relief programs meant to support struggling businesses. The IRS will continue to pursue those who attempt to cheat the system."

Following his conviction, Suel agreed to forfeit $1,466,918 of the $2.4 million seized during the investigation as proceeds traceable to his pandemic relief fraud.

Suel is scheduled for sentencing on December 13, 2024. He could receive up to 30 years in prison for wire fraud and conspiracy charges, with additional penalties for tax evasion and filing false tax returns.