Former Denver restaurateur indicted for fraud, accused of misusing PPP loans

A former Denver restaurateur was arrested and indicted last week on charges of fraud, with federal prosecutors accusing him of receiving more than $1 million in pandemic relief loans under false pretenses and for his personal benefit.

Jared Leonard, whose restaurant group included the Michelin-recommended AJ’s Pit Bar-B-Q, made his initial appearance in the U.S. District Court of Colorado in Denver last week. On Monday, a magistrate judge ordered Leonard be transferred to the northern district of Illinois in Chicago, where he lived previously, and where charges were initially filed last month. He remains in federal custody, according to court documents.

Leonard’s restaurant operations in Colorado officially ended in February, when the staff of AJ’s Pit Bar-B-Q quit en masse and accused him of failing to report taxes or health care contributions. He had already shut down two other concepts, Grabowski’s Pizzeria and Campfire, earlier that month. At the time, he told The Denver Post he had moved to Mexico to run his remaining restaurants in the Punta Mita resort community.

A spokesperson for the U.S. District Court of Colorado and Jennifer Beck, the public defender who represented Leonard in Denver, declined to comment on the case. The district court spokesperson would not confirm where Leonard was arrested.

According to federal charges filed in Illinois last month, Leonard had applied for more than $1.6 million in loans introduced in the Coronavirus Aid, Relief and Economic Security Act. The legislation was enacted as a lifeline for businesses reeling from the effects of the COVID-19 pandemic in 2020.

According to the charges, Leonard lied about the number of employees and monthly payroll at restaurants in Denver and Chicago — including Grabowski’s Pizzeria and AJ’s Pit Bar-B-Q — in his applications for the Paycheck Protection Program and Economic Injury Disaster Loan funds. One restaurant, BBQ Supply Co. in Chicago, had closed in 2018, prosecutors say.

Leonard used the funds for personal purchases despite claiming they would go toward business purposes, according to federal prosecutors. The charges show he bought a $1.2 million house in Colorado in 2020 with the money and paid in cash.

Federal prosecutors are charging Leonard with seven counts, including bank and wire fraud. If convicted, he could be forced to pay the federal government $1.9 million and forfeit property he acquired with the relief funds, according to the charges.