Owners of the Georgetown restaurant Ristorante Piccolo have pleaded guilty to tax evasion and spending thousands of COVID-19 relief funds on personal investments.
Gholam “Tony” Kowkabi, 63, and his wife, 64-year-old Karen Kowkabi of Vienna, Virginia, pleaded guilty in U.S. District Court Monday to tax evasion for their failure to pay $1.35 million in taxes and stealing $738,000 from the emergency COVID-19 small business relief funds the restaurant received in 2020, according to a news release from the U.S. Attorney’s Office for D.C.
According to prosecutors, Gholam Kowkabi admitted to spending the money on a waterfront condo in Ocean City, Maryland; the construction of two homes in Great Falls, Virginia; personal investments and legal expenses; the opening of Divan Restaurant in McLean; home improvement projects; family vacations; and college tuition for their child.
Gholam Kowbaki “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,” said U.S. Attorney for D.C. Matthew M. Graves. “Fraud on the government, including the exploitation of relief funds, is intolerable and will be prosecuted.”
Gholam Kowkabi faces up to 20 years in prison and financial penalties for wire fraud and five years for tax evasion. Karen Kowkabi faces fives counts of failing to pay taxes which carries a one-year sentence and financial penalties.
Their hearing is set for Dec. 1.
The Kowkabis have owned Ristorante Piccolo on 31st Street Northwest in Georgetown since 1986. All told, prosecutors said the Kowkabis amassed an unpaid tax balance of $1.3 million from 1998 to 2018. The two now have agreed to pay that back to the IRS.
In June of this year, a two-alarm fire broke out at the Ristorante Piccolo restaurant, causing the roof to collapse. Two firefighters suffered minor injuries while battling the flames that lasted nearly four hours.
