AJ’s Pit Bar-B-Q Owner Indicted on Fraud Charges, PPP Loan Misuse Allegations

Pit Bar-B-Q owner Arrested on Federal Charges for COVID-19 Relief Fraud

Denver, CO – Jared Leonard, the owner of the now-closed AJ’s pit Bar-B-Q in Denver, was arrested last week and made his initial appearance in the U.S. District Court of Colorado. A magistrate judge has since ordered his transfer to Chicago, Illinois, where federal charges were initially filed against him last month. Leonard remains in federal custody.

The allegations against Leonard stem from applications for over $1.6 million in loans intended for businesses impacted by the COVID-19 pandemic through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Prosecutors claim leonard misrepresented the number of employees and the payroll figures for several of his restaurant operations in both Denver and Chicago, including AJ’s Pit Bar-B-Q and Grabowski’s Pizzeria.Crucially, the charges indicate that one of the businesses listed on the loan applications, BBQ Supply Co. in Chicago,had ceased operations in 2018.

According to federal prosecutors, Leonard allegedly diverted these relief funds for personal use, despite stating they would be used for business expenses. The charges outline that in 2020, Leonard purchased a $1.2 million home in Colorado with cash, purportedly using funds obtained through these fraudulent loan applications.

Leonard faces seven federal charges,including bank and wire fraud. if convicted, he could be ordered to repay $1.9 million to the federal government and forfeit any property acquired with the fraudulent funds.

The legal troubles for Leonard come after the abrupt closure of his Denver restaurant ventures earlier this year. In February, the entire staff of AJ’s Pit Bar-B-Q quit en masse, citing accusations that Leonard failed to report taxes or healthcare contributions. around the same time, two other concepts, Grabowski’s Pizzeria and Campfire, were also shuttered. Leonard had previously told The Denver Post that he had relocated to Mexico to manage his remaining restaurants in the Punta Mita resort community.

The Colorado Department of Revenue had previously seized and auctioned off AJ’s Pit Bar-B-Q due to unpaid state taxes. The establishment is now under new ownership and has been rebranded as Riot BBQ Co.The pitmaster formerly associated with AJ’s Pit Bar-B-Q, Patrick Klaiber, who contributed to the restaurant earning a Bib Gourmand in the state’s original Michelin Guide, is now involved in the new venture alongside chef Manny Barella.

“I’m happy it finally all caught up to him,” Klaiber commented on the recent developments.

Other entities implicated in the federal indictment against Leonard include Hamburger Stan in Chicago and an umbrella organization known as SS Collective.

A spokesperson for the U.S. District Court of colorado and Jennifer Beck, Leonard’s public defender in Denver, declined to comment on the ongoing case. The court spokesperson also withheld details regarding the specific location of Leonard’s arrest.

What specific payroll records were allegedly falsified by the owner of AJ’s Pit Bar-B-Q to obtain a larger PPP loan?

The Indictment Details: Allegations of PPP Fraud

On July 14, 2025, the owner of AJ’s Pit Bar-B-Q, a popular regional chain, was indicted on multiple counts of fraud, centering around alleged misuse of Paycheck Protection Program (PPP) loans. The indictment, filed in the[RelevantDistrictCourt-[RelevantDistrictCourt-replace wiht actual court], details accusations of falsifying payroll records and diverting funds intended for employee retention to personal use. This case highlights the ongoing scrutiny of PPP loan recipients and the government’s commitment to prosecuting PPP loan fraud.

Key allegations include:

Inflated Payroll costs: The owner allegedly overstated the restaurant’s payroll expenses to qualify for a larger loan amount.

Non-Eligible Expenses: Funds were reportedly used for purchases unrelated to business operations, such as luxury goods and personal travel.

False certifications: The owner is accused of falsely certifying the necessity of the loan and adherence to PPP guidelines.

Multiple Loan Applications: Allegations suggest attempts to secure PPP loans from multiple financial institutions together.

Understanding the paycheck Protection program (PPP)

The PPP, established under the CARES Act in 2020, was designed to provide financial relief to small businesses struggling during the COVID-19 pandemic. The program offered forgivable loans to businesses that maintained employee payroll and met specific criteria. However, the rapid rollout and limited oversight created opportunities for fraudulent activity, leading to numerous investigations and prosecutions. Common PPP loan violations include misrepresentation of business needs, ineligible spending, and duplicate applications.

The Role of Anti-Fraud Units in PPP Loan Investigations

Government agencies,including the Small Business Administration (SBA) and the Department of justice (DOJ),have been actively investigating PPP loan abuse. As highlighted by the Bundesministerium für Finanzen (German Federal Ministry of Finance), dedicated anti-fraud units are crucial in combating financial crimes like these. These units employ various techniques, including:

Data Analytics: Identifying suspicious patterns and anomalies in loan applications and disbursement records.

Financial Forensics: Tracing the flow of funds to uncover illicit activities.

International Cooperation: Collaborating with foreign authorities to investigate cross-border fraud schemes. (Referencing https://www.bmf.gv.at/en/topics/combating-fraud/anti-fraud-units.html for examples of international anti-fraud efforts).

Whistleblower Programs: Encouraging individuals to report suspected fraud.

Potential Penalties for PPP Loan Fraud

The consequences for PPP loan fraud can be severe. Depending on the extent of the fraud and the specific charges, the AJ’s Pit Bar-B-Q owner could face:

1. Criminal Charges: Including wire fraud, bank fraud, and making false statements to the government.
2. imprisonment: potential prison sentences can range from several years to decades.
3. Financial Penalties: Fines can reach hundreds of thousands of dollars.
4. Asset Forfeiture: The government may seize assets obtained through fraudulent means.
5. Reputational Damage: Meaningful harm to personal and business reputation.

Impact on AJ’s Pit Bar-B-Q and the Restaurant industry

The indictment has already sent shockwaves through the restaurant industry and among AJ’s Pit Bar-B-Q’s loyal customer base.The immediate impact includes:

Brand Damage: Negative publicity and loss of customer trust.

Operational disruptions: Potential for temporary closures or reduced services.

Financial Instability: increased scrutiny from lenders and investors.

Industry-Wide Concerns: Reinforces the need for stricter compliance measures within the restaurant sector.

Resources for Reporting PPP Fraud

If you suspect PPP loan fraud, it’s crucial to report it to the appropriate authorities. Here are some key resources:

SBA Office of inspector General (OIG): https://www.sba.gov/oig

Department of Justice (DOJ): https://www.justice.gov/

FBI: https://www.fbi.gov/

SBA Fraud Hotline: [phone]

Related Search Terms

Small business Loan Fraud

CARES Act Fraud

COVID-19 Relief Fraud

Restaurant Fraud

Financial Crime Investigation

**