Fraud Friday – First Ever False Claims Act Settlement for the Restaurant Revitalization Fund
November 3, 2023
Delaney Sexton
Contributing Editor
Fraud Friday – First Ever False Claims Act Settlement for the Restaurant Revitalization Fund
United States Attorney Freedman states: “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.”
Dawood “David” Beshay agreed to pay $2 million to resolve allegations that Feast American Diners was not eligible for a Restaurant Revitalization Fund grant. As the corporate owner and managing member of multiple Denny’s restaurants in Arizona and New York, his company owned and operated too many locations to qualify for funding according to U.S. Attorney Carla Freedman.
The RRF program states that an entity is not eligible for a grant if it owns or operates more than 20 locations. Beshay admitted in the settlement that he applied for almost $1 million and indicated that he did not own or operate more than 20 locations despite having 21 locations. Later in the application, he initialed next to the statement that “The Applicant, together with its affiliates, does not own or operate more than 20 locations.” All 21 of Beshay’s Denny’s locations made sales on the day that determined a restaurant’s eligibility for the RRF program.
In December 2022, the investigation began after a whistleblower filed a qui tam complaint, and the whistleblower will be receiving $200,000 of the settlement.
“Those who provide false information for the purpose of receiving and retaining SBA program funds meant for eligible small businesses will be held accountable,” says SBA Office of Inspector General (OIG) Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite. “Today’s 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.”