San Diego Restaurant Owners Charged With COVID-Relief Fraud

May 24, 2023

The owners of several San Diego restaurant have been charged with conspiracy to commit wire fraud, wire fraud, and money laundering for allegedly falsifying applications for pandemic relief funds.

A federal grand jury in San Diego returned an indictment last week charging Leronce Suel, 46, and RaVae Smith, 45, with conspiracy to commit wire fraud, wire fraud, and money laundering. Under their Rockstar Dough LLC and Chicken Feed LLC, the partners have operated several restaurants around San Diego, including Streetcar Merchants Of Fried Chicken in North Park, Suckerfree Southern Plates & Bar in the Gaslamp and ShotCaller Street Soul Food in Lincoln Park.

According to the indictment, from March 2020 to June 2022, Suel and Smith allegedly conspired to underreport over $1.7 million in gross receipts on Rockstar Dough LLC’s 2020 corporate tax return filed with the IRS in order to qualify for the COVID-related Paycheck Protection Program and Restaurant Revitalization Funding loans. Suel and Smith also allegedly made materially false certifications on loan applications regarding the use of the money. The indictment charges that Suel and Smith made substantial cash withdrawals from their business bank accounts to launder the fraudulently obtained funds. As part of the conspiracy, Suel and Smith allegedly concealed more than $2.4 million in cash at their residence.

"During an unprecedented public health emergency, the United States provided these loan programs to deliver economic relief to Americans," said U.S. Attorney Randy Grossman for the Southern District of California. "This office will investigate and prosecute those who exploited the global pandemic to unjustly enrich themselves. We encourage anyone with information regarding individuals who have engaged in COVID-relief fraud to come forward."

Suel and Smith made their initial court appearance this week before U.S. Magistrate Judge William V. Gallo of the U.S. District Court for the Southern District of California. If convicted, they face a maximum penalty of 30 years in prison for wire fraud and conspiracy to commit wire fraud and 10 years in prison for money laundering. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Randy S. Grossman for the Southern District of California made the announcement.

"The CARES act was passed to aid those in need and provide much needed relief during the Covid-19 pandemic," said Special Agent in Charge Tyler Hatcher of the Los Angeles Field Office. "Unfortunately, there are individuals and organizations who took advantage and targeted these programs to steal funds. Submitting false returns in support of a fraudulent loan application is a crime. IRS-CI is committed to aggressively investigating these crimes and bringing those to justice who stole funds and targeted relief programs during the pandemic."

The IRS-Criminal Investigation are investigating the case and Trial Attorney Julia Rugg of the Justice Department’s Tax Division and Assistant U.S. Attorney Christopher Beeler of the Southern District of California are prosecuting the case.

Suel and Smith still own and operate ShotCaller Street Soul Food in Lincoln Park and StreetCar Merchants Chicken Bar in North Park, although Streetcar will eventually become a new bar & restaurant concept dubbed Happy Medium.