Georgetown restaurant owners used emergency COVID relief funds to buy waterfront condo

WASHINGTON — A couple in Virginia faces several charges for failing to pay over a million dollars in taxes and stealing COVID relief funds to go on vacation while operating as the owners of several restaurants in the Washington, D.C. area.

Gholam "Tony" Kowkabi, 63, and Karen Kowkabi, 64, of Vienna, Virginia pleaded guilty in federal court on Tuesday to tax offenses relating to their failure to pay more than $1.35 million in taxes. Tony Kowkabi also pleaded guilty to stealing more than $738,000 from the emergency small business relief funds his Georgetown restaurant, Ristorante Piccolo, received during the COVID-19 pandemic. 

As part of his plea, Tony Kowkabi admitted to spending money, intended to help his business, on a waterfront condo in Ocean City, Maryland,  on personal investments, vacations for his family, and college tuition for his child.

“This defendant robbed a program intended to help fellow restauranteurs and small business owners who were struggling to stay afloat amid the devastating economic impacts of the COVID-19 pandemic,” said U.S. Attorney Graves. “He also created an elaborate scheme to hide assets and play a shell game with the IRS so he could avoid paying the more than one million dollars in taxes that he and his business owed. Fraud on the government, including the exploitation of relief funds, is intolerable and will be prosecuted.”

Tony Kowkabi pleaded guilty in the U.S. District Court for the District of Columbia to wire fraud and tax evasion. Wire fraud carries a statutory penalty of 20 years and financial penalties. Tax evasion carries a statutory penalty of five years and financial penalties.

Karen Kowkabi pleaded guilty to five counts of willfully failing to pay taxes. Failing to pay tax carries a statutory penalty of one year and financial penalties.

Both Tony and Karen Kowkabi are scheduled to be sentenced on December 1.

A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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