Ex-IHOP franchisee, wife plead guilty

Wood County man hired illegal aliens, provided fake IDs, and laundered funds

Tarek Elkafrawi, 57, of Middleton Township pleaded guilty in federal court to 53 counts, including fraud and arson.

Tarek Elkafrawi, 57, of Middleton Township pleaded guilty in federal court to 53 counts, including fraud and arson.

Though their attorneys said their clients did not agree with every allegation leveled against them, former Toledo-area IHOP franchisee Tarek Elkafrawi and his wife entered guilty pleas Thursday to all of the charges they faced.

Tarek Elkafrawi, 57, of Middleton Township near Perrysburg, pleaded guilty in federal court to 53 counts, including conspiracy to commit money laundering, alien harboring, identity theft, mail fraud, health-care fraud, and arson. Kelly Elkafrawi, 51, pleaded guilty to one count each of money laundering and alien harboring.

The couple and 16 of their employees were indicted in 2012 in what federal prosecutors described as a “multi-leveled” scheme that defrauded IHOP’s corporate owner, the government, an insurance company, and others of more than $4.5 million between December, 2003, and 2012.

Duncan Brown, an assistant U.S. Attorney, told U.S. District Court Judge David Katz that Elkafrawi hired more than 200 illegal aliens to work in his restaurants — six of which were in northwest Ohio and one in Evansville, Ind. — then gave them false identification documents and, in some cases, multiple identities that let them under-report income and qualify for government assistance programs.

Mr. Brown said Elkafrawi manipulated sales records, payroll, and profit/​loss statements at the restaurants “to siphon off literally tens of thousands of dollars” from the restaurants and reduce the amount he owed as a franchisee to IHOP corporate.

In August, 2008, he and others set fire to the Findlay IHOP and then filed fraudulent insurance claims, Mr. Brown said.

Attorney Stephen Hartman, who represents Elkafrawi, told the court repeatedly that his client did not agree with all of the government’s allegations and in particular objected to the arson charges, but he said his client felt that entering guilty pleas was “in his best interest.”

Several Northwest Ohio IHOPs were raided in 2011.

The case had been set for trial July 21.

Mr. Hartman said his client has serious medical issues as well as memory problems that would make it difficult for him to say what facts he would or would not agree to.

Elkafrawi himself told the court he had open heart surgery in 2004 and now has severe blockage in his arteries and chest pain every day.

“The reason we entered into this plea,” Mr. Hartman said afterward, “is there’s a real possibility a two to three-week trial would kill him. We had that from a doctor — that he may not live through a trial.”

Elkafrawi faces more than 65 years in prison, although federal sentencing guidelines and the terms of the plea agreement are likely to reduce his sentence to less than 20 years.

Cherrefe Kadri, attorney for Kelly Elkafrawi, told the court that while her client “wasn’t involved to the utmost,” she too felt entering a guilty plea was the best way “to finalize these matters.”

Sixteen other co-defendants in the case already have entered guilty pleas, although not all have been sentenced.

Judge Katz allowed the Elkafrawis to remain free on bond.

At Mr. Hartman’s request, he allowed Elkafrawi, who is on house arrest, to leave his home between 11 p.m. and 1:30 a.m. to attend prayers at his mosque for the month of Ramadan. The judge also said he may leave his home between noon and 3 p.m. on Tuesdays and Thursdays to attend to personal business.

A sentencing date was not scheduled.

Contact Jennifer Feehan at: jfeehan@theblade.com or 419-213-2134.