Phony pita business cost state taxpayers dough

A Vernon businessman that supposedly made pita bread, instead bilked Connecticut taxpayers out of hundreds of thousands of dollars.

The Yankee Institute for Public Policy reports Moshen Youssef, supposed owner of Amoun Pita of South Windsor, was indicted last Thursday by a federal grand jury for using a fake pita company to fraudulently obtain $3 million, including $400,000 from the state of Connecticut.

“Two of the charges related to obtaining $400,000 from the Connecticut Department of Economic and Community Development’s (DECD) Small Business Express (SBE) program,” Marc Fitch wrote.

Small Business Express, one of Governor Malloy’s many initiatives, which offers grants and loans to small businesses, awarded Youssef a $300,000 loan and a $100,000 grant five years ago.

According to DECD, the state money was supposed to be used to hold on to 11 jobs and create 25 more. According to the indictment, at the time of his loan application, Youssef had only an average of $33.62 in the bank.

SBE requires companies to show they have funds equal to the grant amount ($100,000 in this case). DECD officials said Youssef gave false bank statements to them showing Amoun Pita had $100,000 in cash and an average balance of $200,000.

After getting the state money and other loans from six different banks and financing companies, Youssef took the ill-gotten gains and moved to Canada in 2014 where he was arrested last March.

Youssef supposedly started the company in 2011 and began applying for loans and grants. He supposedly went so far as to create websites and marketing materials for his vendors. Youssef also inflated his income and created phony invoices for manufacturing equipment.

“According to online company listings, Amoun Pita, LLC was taking in $1.7 million per year, but it is unknown if the company even existed or manufactured any pita bread,” YIPP reported.

The DCED reports Amoun Pita was one of almost 500 companies to receive $67 million in low-interest loans and grants to create 1,738 new jobs and “retain” 4,616 in 2012.

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