PHILADELPHIA – In a scathing indictment, former Montgomery County restaurant owner Giuseppina "Josephine" Leone, 61, of North Wales, PA, has been charged with three counts of wire fraud for perpetuating a brazen scheme involving Paycheck Protection Program (PPP) and Restaurant Revitalization Fund (RRF) loans.
The indictment, unsealed by the Department of Justice, alleges that Leone and her husband, proprietors of Ristorante San Marco (RSM) in Ambler, PA, submitted false applications for COVID-19 relief loans totaling $957,196. The funds were allegedly used to line Leone’s pockets, rather than supporting the struggling restaurant or its employees.
Leone’s scheme began in April 2020, when she submitted a fraudulent application for a PPP loan in the amount of $138,000. The application misrepresented RSM’s employee count and intended use of the funds, claiming the restaurant had 17 employees and would use the loan for payroll and other operating expenses. The loan was subsequently approved, and the funds were deposited into RSM’s bank account.
In January 2021, Leone attempted to scam the system again, submitting a second fraudulent PPP loan application seeking $120,000. The application made similar misrepresentations, and the loan was approved, resulting in the requested funds being deposited into RSM’s bank account in February 2021.
Leone’s third and most egregious act of deception occurred in May 2021, when she submitted a fraudulent application for a grant under the RRF program, requesting $699,196 for restaurant operations. The application misrepresented that RSM was in operation and that the money would be used to pay employee wages. The funds were subsequently deposited into RSM’s bank account in May 2021, just one month before Leone closed on the sale of the restaurant.
According to the indictment, Leone misrepresented to the federal government that the RRF funds had been used for eligible purposes, even though RSM was never reopened by her. If convicted, Leone faces a maximum possible sentence of 20 years in prison for each count and a total fine of $750,000. The defendant will also be required to forfeit all proceeds received as a result of the alleged fraud, including the sum of $957,196.
The case was investigated by the Small Business Administration Office of Inspector General, the Federal Bureau of Investigation, and Homeland Security Investigations. Assistant United States Attorney Angella Middleton is prosecuting the case.
As the investigation continues, one thing is clear: Leone’s actions demonstrate a callous disregard for the well-being of her employees and the integrity of the COVID-19 relief programs. It is our hope that justice will be served, and those responsible for these egregious crimes will be held accountable.
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Key Facts
- State: Pennsylvania
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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