A Bergen County man received $150,000 in federal loans to help an already-shuttered restaurant get through the COVID-19 crisis, then spent the money on high-end merchandise, restaurant meals and a gondola ride at the Venetian Hotel in Las Vegas, the U.S. Attorney’s Office alleged Friday.
Federal authorities say George Leguen, 46, of Paramus, applied to the Small Business Administration in August 2020 for a loan to support his Manhattan eatery, One Fifty One Restaurant & Lounge.
On the application, Leguen allegedly wrote the restaurant made $1.38 million the year before the pandemic, suffered $70,000 in rental losses because of the novel coronavirus and had a dozen employees as of Jan. 31, 2020. The federal government depended on this information to figure out how much money to loan Leguen, the complaint said.
The only problem was that Leguen’s restaurant had already closed back in June of 2019, making it ineligible for the COVID relief, according to the Internal Revenue Service special agent who filed the complaint. When law enforcement officials visited the Dyckman Street address Leguen listed for the restaurant, they found the space for rent.
Federal prosecutors have charged Leguen with wire fraud and money laundering.
“Exploitation of the global pandemic for illicit financial gain victimizes consumers, taxpayers, and federal programs alike,” Acting U.S. Attorney Rachael Honig said in a statement. “We are working with our law enforcement partners to investigate these schemes and bring to justice all those who would try to take advantage of the programs established by Congress to help America through the pandemic.”
A phone call to Leguen’s home in Paramus went unanswered Friday evening.
The loans were meant to be used only on business-specific expenses such as paying fixed debts, payroll or accounts payable, the complaint said. But Leguen allegedly spent it on a litany of personal items, such as high-end buys from Valentino, Versace and Gucci; restaurant meals; airfare and a gondola ride at the Las Vegas resort, authorities said.
On Oct. 2, 2020, Leguen allegedly transferred about $65,000 in federal money from his business account to a personal installment loan account.
He and his unnamed business partner applied for two more loans from the same program last September, but were denied both times.
Leguen also allegedly lied about the restaurant’s purported revenues, the complaint said. And the New York Department of Labor had no record of GJEG LLC, which was the company Leguen set up with another unnamed Bergen County resident that did business as One Fifty One Restaurant, the complaint said.
The complaint noted that the city had revoked One Fifty One’s liquor license in 2019 after a number of violations.
Steve Janoski covers law enforcement for NorthJersey.com. For unlimited access to the most important news about those who safeguard your local community, please subscribe or activate your digital account today.