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Tacos With A Side Of Greed

Tacos With A Side Of Greed

Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

On February 6, 2023, Taco Habitat closed its doors after an eviction notice for non-payment of rent was issued by Green County. According to the court judgement, Taco Habitat owner Michael Felts owed more than $63,000 in unpaid rent, real estate taxes, maintenance fees, and court costs. According to Felts’s lawyer, Felts is the victim of fraud. But that couldn’t be any further from the truth. Felts may have intended to be legitimate restauranter, but in in the end, the only thing Felts was victim to was his own greed. Restaurants were hit hard during the pandemic which is why the government established COVID-19 Paycheck Protection and Economic Injury Disaster Loans. Felts received almost $10,000,000 in COVID-19 Paycheck Protection and Economic Injury Disaster Loans and not one dollar of it went towards the sale of tacos.

On August 1, 2023, Felts admitted in federal court that he fraudulently filed for $13,925,534 in loans from the CARES Act from January 2018 to Sept. 13, 2022. Felts initially applied for 12 PPP loans using several different companies under his ownership or control, like Taco Habitat or Cluck (Eggcellent buffalo wings I hear!). At the time the applications were filed, most of these companies did not have employees and were not in operation at the time of application. But Feltz also fabricated identities and companies without even using the façade of a storefront. Felts applied for 13 PPP loans using synthesized that he made up only for the purpose of fraud.

Of course, Felts did not utilize the loan proceeds for the purpose he represented to the lenders in the application process. He would have been able to pay the rent for Taco Habitat if he did that. Instead, he utilized proceeds for his own personal benefit including vehicles, a yacht, jewelry, rare sports cards, and construction related to personal residences.

Great job in this investigation by the Internal Revenue Service.

Today’s Fraud of The Day is based on article “Former Taco Habitat owner pleads guilty to fraud” published by the Brandson Lake News on August 1, 2023

The man behind a planned Taco Habitat in Branson, which never opened, has pleaded guilty to federal charges related to a $14 million wire fraud conspiracy and could be spending four decades in prison.

John Michael Felts, who was known best for Springfield restaurants Hot Cluckers, Taco Habitat, and Bourbon & Beale, made his plea in federal court in Springfield on Friday, July 28. He pleaded guilty to wire fraud  and conspiracy to commit wire fraud related to his using various companies to make fraudulent applications for $13,925,534 in loans during the COVID-19 pandemic. 

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