West Side Restaurateur Given 57 Months in Prison for $6m COVID Loan Fraud

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West Side restaurateur Besim Kukaj was sentenced this month to 57 months in prison for fraudulently seeking at least $6.14 million and receiving at least $1.5 million from the federal government’s COVID-19 relief loans, announced Damian Williams, US Attorney for the Southern District of New York. Kukaj was also charged with intimidation and threats to a creditor with his co-defendant, Abduraman “Diamond” Iseni.

Restaurants run in Hell’s Kitchen in recent years by Kukaj through BKUK Group include Maria Pia at 319 W51st Street, Cara Mia at 693 Ninth Avenue (and other locations), Gallo Nero at 402 W44th Street, Intermezzo at 632 9th Avenue (and other locations) and Limon Jungle at 803 9th Avenue. Information from the court did not make clear which restaurants he had made fraudulent applications for. BKUK claimed on their website that they have “17 years of restaurant experience” and run 10 establishments in New York.

In July 2022, Crain’s reported that in the past eight years, Kukaj had been part of a dozen wage violation settlements in which he had been ordered to pay more than $4.2 million to former dishwashers, cooks, delivery workers and bartenders at his restaurants in Hell’s Kitchen, Chelsea and Greenwich Village. Last summer, more than 20 former employees sued him, claiming he had not paid a cent of the $2.4 million a judge ordered him to pay in December 2021.

Back in November 2022, Kukaj admitted conspiring with others to try to secure more than $3.5 million dollars in government-backed loans intended for businesses devastated by the COVID-19 pandemic. “Kukaj told banks that his restaurants operated with dozens of employees, when in fact he employed far fewer people. These brazen lies tricked banks into sending him approximately $1.5 million in loans. Even after his arrest, Kukaj continued to submit false loan applications,” said Williams in a statement.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided financial assistance to millions of Americans suffering from the economic effects of the pandemic, including forgivable loans through the Small Business Administration’s Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan program (EIDL). Kukaj, together with other conspirators, submitted fraudulent loan applications to various banks for the PPP and EIDL programs, using corporate entities and restaurants that were either closed or had significantly reduced revenue.

In July 2020, W42ST reported that businesses in Hell’s Kitchen had been awarded $572 million in PPP funds. At the time, local businesses reported retaining 31,742 jobs through the PPP process. The average cost was $18,049 per job retained. PPP fund records show that BKUK Corporation received $250,000 for a business at 654 9th Avenue (a former location of Cara Mia that had been vacated before the pandemic).

Kukaj was arrested in October 2020 and indicted for bank fraud conspiracy in December 2020. However, he continued to file false loan applications, violating the terms of his bail. The fraudulent applications were inflated with fictitious employees and payrolls, and he falsely claimed that he was not under indictment.

In addition to the prison sentence, Kukaj, a 43-year-old from Fort Lee, New Jersey, was ordered to pay a forfeiture of $1,500,000 and restitution of $1,500,000 to the US Small Business Administration.

“He did this out of pure greed, sending some of this money to a Florida real estate developer and using it to buy luxury items from Cartier and Hugo Boss,” Williams said. “And he didn’t stop there. He directed his co-conspirator to physically threaten a victim to whom he owed money. For his brazen crimes, Kukaj will serve meaningful time in prison.”