OC restaurant group files $20 million PPP fraud lawsuit | #phishing | #scams


LAGUNA NIGUEL, Calif. — John Nye runs Hendrix in Laguna Niguel, and with restaurant operations back in full swing, he can hardly believe his business survived the pandemic.

“It has been probably the longest year of my life. It just didn’t get better for so long and it was devastating,” Nye said. 


What You Need To Know

  • A $150,000 Paycheck Protection Program (PPP) loan was taken out under Sentinel Restaurant Group – the restaurant company John Nye operates
  • According to Nye, two people he considered mentors filed the PPP application without his knowledge
  • Nye filed a lawsuit over the fraud seeking $20 million in damages
  • Tim Chang, an attorney for Kitti Lo, sent an email saying she was not involved in the loan application process or the distribution of the funds and denies all the allegations

One day during the lockdowns, with his restaurant empty and a stack of bills piling up, he noticed a letter in the mail from the SBA. It was a statement requesting a payment on a $150,000 Paycheck Protection Program (PPP) loan someone had taken out under Sentinel Restaurant Group — the restaurant company he operates.

However, Nye had no idea who filed the application. It was like a sucker punch, Nye said. He immediately called the bank.

“They wouldn’t talk to me about it because it wasn’t in our name. I was not listed on it, but it was against my business. It was money that was assigned to me that I owe that has now affected me in every part of my life and I’m on the hook for it,” Nye said.

According to Nye, two people he considered mentors, who had invested in his restaurant group before Hendrix opened, had filed the PPP application without his knowledge.

Consequently, because of their PPP application, Nye’s was rejected.

Things were made even worse when he filed a complaint of fraud with the bank. The case was marked as potential fraud caused serious ripple effects for Nye’s company.

Nye said he was in the middle of a once-in-a lifetime investment deal involving the restaurants that suddenly vanished.

“They were trying to finance the deal with a bank and the fraud came up as an alert and it soured the whole thing. It is kind of like it was our whole future. It was our retirement plan, our finish in the industry, our glory days. It was deals across the United States. It was the stuff you just dream of and it’s just gone,” Nye said.

A recent congressional investigation estimates more than a billion dollars of PPP money went to fraudulent applications throughout the pandemic. Because of the domino effect damages, Nye filed a lawsuit over the fraud seeking $20 million in damages.

Nye’s attorney, Edward Susolik, who prosecutes fraud, said this case stands out in a growing area of filings.

“At this level of just brazen, absolute open fraud, (there’s) not much but there is a significant amount of PPP fraud that’s out there, as well as EDD fraud,” Susolik said. “This stands out because they did it so overtly. They knew they’d get caught.”

Spectrum News contacted the defendants, Amy Hsiao and Kitti Lo of Newport, California. 

Tim Chang, an attorney for Lo, sent an email saying she was not involved in the loan application process or the distribution of the funds and denies all the allegations.

“Kitty Lo was not involved in any way in the transactions alleged in the Complaint. Indeed, as Ms. Hsiao expressly states under penalty of perjury, Ms. Lo had no interest in Newport Restaurant and Hospitality Group in 2020 and was not involved in any manner in the loan application process, the loan approval or the distribution of the loan funds.”

Spectrum News 1 did not hear back from Hsiao.

As for Nye, he said this was a hard lesson after an extremely hard year.

“Be careful who you trust with your information. I just hope I can get back what I lost because of it,” Nye said.



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