Loudoun restaurateur sentenced to 12 years in $71 million loan scam on 8 banks
Saturday, August 28, 2010
A Loudoun County man who rose from a teenage employee at a Sterling deli to own a string of area restaurants, and who by his own account fraudulently borrowed more than $71 million from eight banks, was sentenced Friday to 12 years in prison.
Last year, when it all came crashing down for Osama M. El-Atari, 31, he fled the country, authorities said. The Ashburn resident left behind a string of creditors, flashy sports cars and a $3.9 million house bought with money he scammed from banks in Virginia, Maryland, Tennessee and Ohio, court records show.
The scam was simple: Present a life insurance policy with a cash value of millions of dollars to use as collateral. The string of frauds began in 2007 when United Bank in Vienna loaned El-Atari $5 million based on an insurance policy that had zero cash value, according to a statement of facts signed by El-Atari in April when he pleaded guilty to bank fraud and money laundering.
In 2008, El-Atari used the same approach with other banks, claiming that his insurance policies had cash values of as much as $15 million. At times, court records show, he would create phony e-mails from non-existent insurance agents, as well as a fake Web site, to "verify" his policies.
In a sentencing memorandum written by his attorneys, Bernard S. Grimm and Katherine Yingling, El-Atari said a loan officer at United Bank showed him how to obtain fraudulent insurance documentation, and the two "began working together to falsify life insurance documents."
The officer, Sissaye Gezachew, 32, an assistant vice president at United Bank, pleaded guilty in June and faces up to 30 years when he is sentenced Sept. 3.
Through winter 2009, El-Atari obtained loans or lines of credit between $4 million and $12 million, sometimes using one loan to repay another when a bank became suspicious. He used the money to buy Ferraris, Lamborghinis and his Ashburn home, he said in his guilty plea.
In a 2008 Washington Post article reporting that the economic slump had not deterred Lamborghini from opening a showroom in the Dulles area, El-Atari was interviewed while having his Lamborghini Murcielago serviced. He said that he had another Lamborghini, two Ferraris, two Mercedes, a Rolls-Royce Phantom and a Cadillac Escalade. He said that his auto insurance bill was $18,000 a month.
"I have no other bad habits," El-Atari said, adding, "I drive my cars to work."
El-Atari's attorneys acknowledged his "extravagant lifestyle" but said it was funded by profits from his businesses, not by the loans. He owned Original Steakhouse and Sports Theaters in Ashburn and Woodbridge, the Crofton Shopping Center, the Cantina Cove in Brambleton, Va., and a hotel in Nashville. He also helped launch the Buffalo Wing Factory restaurants in Sterling, Ashburn, Reston and Chantilly.
His attorneys said El-Atari started as a 15-year-old counter worker at The Deli in Sterling and bought the deli three years later with his brother, turning it into the first Buffalo Wing Factory. He later launched the Original Steakhouses.
"His fraud was fueled by his own greed and a desire to live a lifestyle that he did not earn," prosecutors wrote in a sentencing brief.
El-Atari fled the country in May last year but was spotted at a Ferrari dealership in Houston in January. He was arrested a short time later at a Houston airport, authorities said.
Of the approximately $71 million El-Atari obtained from the banks, his attorneys said that he had repaid more than $17 million with other fraudulent loans. U.S. District Judge Gerald Bruce Lee ordered him to repay the remaining $53 million in restitution.