Sylvania Man Sentenced to Nearly Five Years in Prison for Criminal Schemes Centered Around IHOP Restaurants
Mazen Khdeer was sentenced to nearly five years in prison for his role in a series of criminal schemes that money laundering, identity theft, alien harboring and arson, centered around seven IHOP restaurants in northwest Ohio and Indiana, law enforcement officials announced today.
Khdeer, 55, of Sylvania, was also ordered to pay $1.3 million in restitution and to forfeit two properties. He previously pleaded guilty to 13 counts, including money laundering, malicious use of fire, conspiracy to harbor aliens, identity theft, conspiracy to commit health care fraud and filing false claims.
Khdeer was the last of 18 people to be sentenced for their roles in a series of criminal schemes that resulted in losses of more than $3 million.
“These defendants turned pancakes houses into crime dens,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “These defendants engaged in a range of crimes ranging from harboring undocumented workers to identity theft to money laundering to insurance fraud.”
“Today is the final sentencing of 18 individuals who utilized a chain of IHOP restaurants as their platform to engage in organized crime,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office. “This wraps up years of tenacious investigative and prosecutorial work by all agencies involved.”
Other sentences included Tarek “Terry” Elkafrawi, whe was sentenced to eight years in prison, Tarek Eid Omar, who was sentenced to more than four years in prison, and Jose Leon-Gonzalez, who was sentenced to more than three years in prison.
Elkafrawi owned seven IHOP restaurants in Evansville, Indiana and Holland, Toledo (two locations), Findlay, Perrysburg and Lima, Ohio. He and others used their control of the restaurants to execute various criminal activities to fraudulently manipulate sales figures, salaries and payrolls to evade taxes, avoid paying royalties and illegally divert money from the IHOP franchises to themselves, according to court documents.
Elkafrawi employed about 200 illegal immigrants to work at his restaurants, most of whom used fraudulent or stolen identities while working. He and others employed several people to arrange for the arrival of the workers. If the worker had false paperwork or documentation, the manager would accept it without verification; if they did not have documentation, Elkafrawi and others would arrange for Carlos Gonzales and others to obtain fraudulent documentation for the workers, according to court documents.
Elkafrawi also arranged for managers to cash payroll checks for the illegal workers. Elkafrawi and others assigned second identities to workers to avoid paying overtime wages and reduce the restaurants’ payments to the Ohio Bureau of Workers Compensation. They were also able to underpay the undocumented workers because they knew the workers would not complain or report them to law enforcement. Overall, Elkafrawi and others were able to generate $1.2 million in unreported income by manipulating wages and underreporting income of undocumented workers, according according to court documents.
In 2008, the Findlay IHOP burned as the result of arson. The fire was started by Gonzales at the direction of Elkafrawi and a Khdeer to facilitate an insurance fraud scheme. Elkafrawi claimed approximately $1.3 million in fraudulent insurance claims, based in part on inflated payroll claims, lost income and invoices, according to court documents.
Khdeer used two identities to split his salary from the restaurants between two paychecks, creating lower reportable income for both. Using those identities, he claimed approximately $140,000 in Medicaid payments and $35,000 in food stamps and welfare benefits from the state of Ohio. Khdeer and Elkafrawi created a false property company to which Khdeer paid “rent” to Elkafrawi to show a lower income. Elkafrawi and Khdeer sanctioned and encouraged employees to file fraudulent claims, according to court documents.
This case is being prosecuted by Assistant United States Attorneys Duncan T. Brown following an investigation by the Federal Bureau of Investigation, Immigration and Customs Enforcement—Homeland Security Investigations, Internal Revenue Service, the Ohio Bureau of Worker’s Compensation and Toledo Police.