OHIO – A 55-year-old restaurant owner was sentenced to nearly five years in prison and ordered to pay $1.3 million for harboring undocumented aliens in connection with organized crime involving seven IHOP restaurants in northwest Ohio and Indiana, officials said last week.
Mazen Khdeer was sentenced to nearly five years in prison for his role in a series of crimes that include harboring undocumented workers, money laundering, identity theft, alien harboring and arson, officials said.
Khdeer, 55, of Sylvania, was also ordered to pay $1.3 million in restitution and to forfeit two properties.
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, U.S. 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.”
Other defendants indicted include the following defendants:
- Tarek “Terry” Elkafrawi, who was sentenced to eight years in prison
- Tarek Eid Omar, who was sentenced to more than four years in prison
- Jose Leon-Gonzalez, who was sentenced to more than three years in prison
U.S. District Judge David Katz noted that Elkafrawi had no criminal history, that he suffered from serious health issues, and that he had sustained considerable financial losses in the aftermath of the raids on his restaurants in 2011 and the subsequent indictments in 2012. Still, he said, a prison sentence was appropriate, according to the Toledo Blade Newspaper.
“I believe one of the important messages that can be sent is that the hiring and exploitation of undocumented aliens and money laundering will not be tolerated,” Judge Katz said during the sentencing, the newspaper reported.
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 commit crimes including fraudulently manipulate sales figures, salaries and payrolls to evade taxes, avoid paying royalties and illegally diverting 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 hired several people to bring workers, officials said.
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 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, according to officials.
They were also able to underpay the undocumented workers because they knew the workers would not complain or report them to law enforcement. Overall, officials said 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 a 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.