NOVEMBER 7, 2023. Feast American Diners LLC and Dawood “David” Beshay, the corporate owner and managing member of multiple Denny’s restaurants in both Arizona and New York, have agreed to pay $2 million to resolve allegations that Beshay took advantage of the Restaurant Revitalization Fund (RRF) by certifying that Feast American Diners was eligible for a RRF grant despite knowing that his company had too many locations to qualify. The suit was brought under the qui tam provisions of the False Claims Act (FCA), but the relator was not a person, but a for-profit company called GNGH2.
The case centers around the efforts of the federal government to keep businesses afloat during the COVID-19 pandemic. The American Rescue Plan Act, enacted in March 2021, featured a $28.6 billion Restaurant Revitalization Fund that was administered by the Small Business Administration. It was stipulated that any restaurant that owned or operated over 20 locations as of March 13, 2020, were not eligible to apply to the fund for relief. This was reiterated in April 2021, along with guidance that if a restaurant was making sales, it was in operation.
In the settlement agreement, Beshay admitted that he applied for a RRF grant on Feast American Diners’ behalf, seeking $928,554. Beshay stated on the application that Feast American Diners did not own or operate more than 20 locations as of March 13, 2020. The application specifically stated that if the entity owned or operated more than 20 locations, it would be disqualified from the grant. According to the agreement, Beshay then initialed the document to certify that Feast American Diners did not own or operate more than 20 locations as of March 13, 2020. However, Feast American Diners owned 21 Denny’s locations as of that date, with each of those locations in operation on March 13, 2020. Beshay acknowledged that he should have known this information.
The United States Attorney for the Northern District of New York stated: “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.”
This case is one of multiple qui tam actions filed by the for-profit company, GNGH2, Inc. Attorney David Abrams is the registered agent for the New Jersey-based relator company, and he both filed and represented the relator company in these qui tam lawsuits. GNGH2 discovers allegations by researching publicly available data to identify Payment Protection Program (PPP) and other COVID fund-related fraud.
If you would like to report COVID funds fraud or other government programs fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at www.fraudfighters.net.