The man behind Divan in McLean has been sentenced to nearly five years in prison for failing to pay taxes and stealing COVID-19 relief funds — including money used to establish the Persian restaurant.
His wife Karen Kowkabi, 64, also pleaded guilty to tax evasion and has been sentenced to 24 months of probation.
The pair has also agreed to pay the $1.35 million that they owe the IRS, and Gholam Kowkabi must pay $738,657 to the Small Business Administration as restitution for the relief funds that he got to support his Georgetown restaurant, Ristorante Piccolo, during the COVID-19 pandemic but spent instead on personal expenses.
“As part of his guilty plea, Mr. Kowkabi acknowledged having spent money intended to help his business on a waterfront condo in Ocean City, Md., as well as personal investments, vacations for his family, and college tuition for his adult children,” the U.S. Attorney’s Office said.
After serving the prison term, Gholam Kowkabi will be on supervised release for three years.
According to prosecutors, the couple avoided paying federal income and employment taxes from 1998 to 2018 “by concealing assets and obscuring…large sums of money” through property purchases, false entries in their business records and the use of business bank accounts to hide personal purchases.
During that time frame, the Kowkabis owned and operated Ristorante Piccolo, which opened in 1986, as well as the restaurants Catch 15 and Tuscana West, which were also located in D.C. Tuscana West, an Italian eatery, closed after 20 years in 2014, while Catch 15 closed in 2018, not long after filing for bankruptcy protection.
According to the press release, Gholam Kowkabi received over $1.6 million in federal COVID-19 relief funds — including Paycheck Protection Program (PPP) loans, an Economic Injury Disaster Loan and Restaurant Revitalization Funds — between May 13, 2020 and July 27, 2021.
Instead of using all the money to cover Ristorante Piccolo’s expenses as intended, he spent more than $500,000 to buy a waterfront condo in Ocean City, over $250,000 to build homes in Great Falls, and over $78,500 to establish Divan, which opened at 1313 Old Chain Bridge Road in December 2021.
Funds were also used to on mortgage payments, vacations, personal legal expenses, home improvements and college tuition payments, according to prosecutors.
Gholam Kowkabi was previously sentenced to 18 months in prison for evading $2 million in D.C. sales taxes.
While Divan is still operating, Ristorante Piccolo has been closed since June after suffering damage from a two-alarm fire, including the collapse of its roof.
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