MONA MAHADEVAN
Outside Bridgeport’s federal court on Thursday.
Omar Rajeh, the Syrian-born owner of Mediterranea restaurant and a long-standing fixture in New Haven’s culinary scene, was sentenced Thursday to 15 months in prison for improperly obtaining almost $800,000 in federal pandemic-relief loans.
After handing down the decision, the judge shook Rajeh’s hand and wished him and his family well.
“I’m sad, frankly, for you and your family,” he said to Rajeh. “I hope your time passes quickly in prison.”
PAUL BASS file photo
Omar Rajeh.
Rajeh’s wife, two adult children, and ex-wife sat behind him during Thursday’s proceedings at the federal courthouse on Lafayette Boulevard in Bridgeport.
When U.S. District Court Judge Stefan R. Underhill handed down the sentence – 15 months in prison followed by two years of supervised release, $758,279 in restitution, and a $2,000 fine – they sat frozen in place. His wife threw her arms around Rajeh’s neck as soon as the proceedings ended.
Omar Rajeh, 57, immigrated from Syria in 1989 and later became a U.S. citizen. He entered the New Haven restaurant business in 1993. Five years later, he opened Mediterranea, relocating to its current location at 140 Orange St. in 2001. The restaurant sells a hybrid menu of pizza, Italian fare, and Middle Eastern, and it houses an after-hours hookah lounge in the back. More about Rajeh’s background can be found here.
During Thursday’s proceedings, federal prosecutors alleged that between June 2020 and May 2021, Rajeh received $1,057,244 in loans from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. Those programs, administered by the U.S. Small Business Administration, were designed to provide emergency financial assistance to small businesses during the pandemic.
Rajeh’s accountant prepared filings for the PPP and EIDL programs under three entities: Mediterranea LLC, for the Mediterranea restaurant; M. Café Inc., for the hookah lounge in Mediterranea; and Al Amir LLC, a defunct entity.
According to prosecutors, the applications for the latter two entities included false representations of monthly payrolls, business revenues, and IRS submissions. Because $298,965 of the PPP/EIDL funds were for Mediterannea, Rajeh’s legitimate business entity, prosecutors calculated the fraud amount as $758,279 instead of the full $1,057,244.
On Dec. 20, 2023, Rajeh pleaded guilty to one count of wire fraud and one count of engaging in illegal monetary transactions. His accountant, who pleaded guilty to related charges on May 9 and will be sentenced on August 8, used fraudulent information to complete the forms, which Rajeh then reviewed and signed.
Rajeh’s sentencing hearing was moved forward multiple times so that he could remain available to prosecutors for his accountant’s case.
Rajeh’s defense attorney, Allison Near, argued during Thursday’s hearing for a sentence without prison time, which would be a significant deviation from the statutory guidelines of between 24 and 30 months.
She began her remarks by asking the court to consider his many good deeds, which she described as “really extraordinary.” She cited his advocacy for Syrian refugees, donations to sick family members overseas, and free meals to neighbors in need.
She also referenced his 13 letters of support, written by his family, friends, and fellow community members.
“He works selflessly, often giving up his free time to help others or to help his family when they are in need,” wrote Rajeh’s 23-year-old daughter. “He never complains and is always quick to sacrifice something if it means providing us with an opportunity that he was never able to have.”
Several letter-writers mentioned their shock at hearing of Rajeh’s legal difficulties, citing his work ethic, generosity, and integrity. One described his misconduct as “wholly at odds with the character [she had] observed for more than thirty years,” and another said the incident was something that “stands in stark contrast to the values [Rajeh] has consistently demonstrated throughout his life.”
Near also noted his health problems – which include diabetes, hypertension, and chronic pain – and his role as sole provider for his three young children, elderly mother-in-law, and wife, as reasons to give Rajeh a non-custodial sentence.
“Imprisoning him would not be justice,” wrote Rajeh’s 25-year-old son in a letter of support. “It would be a death sentence for him and for my entire family that would throw our lives into chaos and turmoil.”
According to Near, Rajeh had known his accountant since 2012 and considered him a trusted friend. He gave the accountant full access to his financial accounts and left him in charge of Mediterranea’s business operations, leaving Rajeh to focus on what he loved most: being in the kitchen and connecting with customers.
“On paper, none of this is good, none of this makes sense. It seems nefarious,” said Near. “But I truly believe, if his accountant had never mentioned the PPP…your Honor would only know [Rajeh] as the guy who used to make the best falafel in New Haven until his restaurant shut down.”
Once Near completed her statement, Rajeh stood to offer his own remarks.
In a soft and shaky voice, he said, “I’m very sorry for my mistake…I’m asking for forgiveness to continue raising and supporting my family.”
Judge Underhill then asked Rajeh where all the money had gone. “Nothing in my pocket,” responded Rajeh.
Near outlined his largest expenditures, which include a $220,000 house in North Haven, upgrades to Mediterranea, supplies for the hookah bar, regular personal and business bills, and transfers overseas, including to a family member who needed money to escape Syria.
“There was no car, vacation, or jewelry,” said Near. Rajeh lived a modest lifestyle, she claimed, using the cash infusions only to support his family and keep Mediterranea afloat during the pandemic. The North Haven house is in the process of being sold, and the proceeds will be put towards Rajeh’s restitution.
The prosecution, led by Assistant U.S. Attorney Christopher W. Shmeisser, spent their time highlighting the gravity of Rajeh’s crime.
“It was over $1 million for one individual and small business,” said Shmeisser. “And he got these monies when this nation was reeling.”
The fraud occurred multiple times and over a long period of time, he continued, with large sums directed towards personal bills, impermissible under PPP guidelines.
As of December 31, 2024, the U.S. Department of Justice had brought fraud-related charges against 3,096 defendants accused of abusing pandemic relief programs, arguing that such schemes eroded public trust and disrupted the government’s delivery of emergency aid. During the proceedings, Schmeisser said Rajeh and others who fraudulently obtained PPP/EIDL funds “cost the government an extraordinary amount of money” — a figure potentially approaching $200 billion, according to an estimate from the U.S. Government Accountability Office (GAO).
“The defendant is more savvy than what defense counsel seems to be suggesting,” Schmeisser said, noting that in December 2023, Rajeh told investigators that he could not recall whether he approached his accountant or his accountant approached him about committing PPP fraud. “I don’t want to undersell the defendant’s knowledge or part in what took place.”
Underhill ultimately handed down a custodial sentence. “The fundamental starting point in thinking about your case is the seriousness of the crime,” he said to Rajeh. “It is a crime where everyone in this room, in this community, in this nation is a victim.”
He added that there is a lot of discussion about “waste, abuse, and fraud” in the federal government. While that misconduct is rare, he continued, it is important to treat those crimes “seriously.”
The judge said he was unsure how savvy Rajeh was as a businessman, but made clear that, either way, the accountant was not solely to blame.
“You had to know,” he told Rajeh. “You looked at the paperwork, you knew that you weren’t entitled to money for a defunct entity.”
Though a 15-month term was more than what the defense sought, it was a meaningful deviation from the sentencing guidelines of 24 to 30 months. Underhill cited Rajeh’s health problems, atypical family circumstances, long history of good deeds, and willingness to cooperate with investigators as reasons why he chose a lesser sentence.
Without Rajeh, said Near, Mediterranea will not be able to run, as it only has three part-time employees.
Rajeh is required to report to prison on Oct. 1.