Last edited 1:42 p.m., Sept. 21, 2022
Restaurateur Michael Felts has been accused in federal court of a multimillion-dollar Paycheck Protection Program scheme.
Felts, who owns Hot Cluckers, Taco Habitat, Bourbon and Beale, White River Brewing Co. and other entities, in a Sept. 13 complaint filed in the Western District of Missouri Southern Division is accused of allegedly using PPP funds meant for his businesses instead to pay for residential improvements and purchases. However, the restaurateur claims to have been a victim of identity theft, when reached by Springfield Business Journal this morning.
Court documents allege Felts used companies under his control to complete false and fraudulent applications for PPP loans. U.S. Small Business Administration and financial institution records show Felts applied for at least 12 PPP loans using several different companies under his ownership or control.
"Most of these companies did not have employees and were not in operation at the time of application, despite Felts stating that the companies did have employees and were operating at the time," federal officials allege in the complaint.
Additionally, Felts is accused of allegedly using synthesized or fabricated identities and companies under his control to apply for at least 13 PPP loans.
The federal government is seeking forfeiture of residential properties in the Jones Spring subdivision, near Catalpa Street in east Springfield beyond U.S. Highway 65. Don Ledford, spokesperson for the office of Teresa Moore, U.S. attorney for the Western District of Missouri, said no criminal charges have been filed related to the criminal forfeiture complaint. He declined to comment on whether charges may be filed in the future.
"The United States prays that the defendant properties be forfeited to the United States, that the plaintiff be awarded its costs and disbursements in this action, and for such other and further relief as the court deems proper and just," court documents read.
Reached this morning, Felts claimed to be "a victim of identity theft. That's all I can say." Other than stating his belief that his restaurants would not close as part of the allegations against him, Felts deferred further comment to his attorney, Abe McGull of The McGull Law Firm LLC.
McGull this morning issued a statement to SBJ.
“On Sept. 13, 2022, members of the Internal Revenue Service executed search warrants for information and items concerning Mr. Michael Felts’ business dealings with an individual out of San Antonio, Texas. Mr. Felts has retained legal counsel to handle this matter and cannot comment further concerning this investigation,” the statement reads.
The court complaint does not make mention of San Antonio, Texas.
Tony Brown, assistant U.S. attorney of the Western District of Missouri, is representing the federal government in the case, which was investigated by the IRS.
Felts, who was one of Springfield Business Journal’s 12 People You Need to Know interview guests in 2021, started his work in the local restaurant industry in 2014 with the opening of BYOPizza, according to SBJ archives. He opened Hot Cluckers in 2018, and Taco Habitat and Bourbon & Beale in 2020. Felts purchased White River Brewing Co. in 2021, and he also has worked as an independent contractor for song writing and producing.
A baked goods vendor at Farmers Market of the Ozarks expanded to a brick-and-mortar operation; the first lending center for Old Missouri Bank opened; and London Calling Pasty Co. added a new food truck.