Eatery owner gets 33 months 'Check-kiting' scam closes Kent-area Ponderosa, others

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By Marci Piltz

Record-Courier staff writer

A Cuyahoga County man was sentenced to 33 months in prison Wednesday for his role in what authorities said was the largest "check-kiting" scheme ever conducted in Northeastern Ohio.

The scheme eventually resulted in the closure of several Ponderosa Steak House restaurants, including the one at 1855 S.R. 59 in Franklin Township.

Fred Boukzam, 49, of Brooklyn, received the sentence from U.S. District Court Judge Solomon Oliver Jr. in the U.S. District Court, Northern District of Ohio, in Cleveland.

Boukzam and his company, PON Management -- owned and operated 15 Ponderosa restaurants in Northeastern Ohio, including the Kent-area location -- when each was named in an April indictment from the U.S. District Court. According to the indictment, both Boukzam and PON Management were charged with one count of felony bank fraud.

Court documents indicate Boukzam used his 15 company accounts at FirstMerit bank to float $824 million in checks during a 21-month period, between January 2006 and Sept. 24, 2007. Also during that time, Boukzam had put up several of his restaurants -- including the Kent-area location -- as collateral for more than $2 million in loans.

The Franklin Township location closed last week, even after former employee Carrie Grumney says employees were assured their jobs were not in jeopardy.

"About four days before it closed we were told that they signed a new lease, we had new general managers coming, and they were planning on staying open. Then on (Sept. 14) at about 8:30 p.m. the shift manager called and said not to come to work on Monday and they weren't sure about the future of the restaurant."

Grumney said the manager did not indicate how long the restaurant would be closed.

"I still had a glimmer of hope that maybe it was just a transitional phase," she said. "Then on Monday they called everyone at home and said no, the restaurant was shut down."

Grumney estimated about 40 people worked at the restaurant.

Federal officials said that during the final days of the scheme, the documents say, more than 300 checks were being cashed daily for amounts totaling between $4.9 and $5.25 million each day. When FirstMerit officials discovered the scheme, they suffered a loss of around $4.12 million.

In addition to the criminal charges, Boukzam was the target of a civil lawsuit -- along with several other defendants -- by companies seeking to recoup some of the $2 million in loans that the restaurants had been used as collateral for.

An agreement reached earlier this month in the civil suit resulted in the closure of nine of Boukzam's 15 restaurants, including the one in Franklin Township, Cuyahoga Falls, Akron and Austintown.

In June, Boukzam entered a guilty plea on the criminal charges on behalf of both himself and PON Management.

U.S. Attorney John Sammon said Boukzam's case is the largest of its type ever prosecuted in Northeastern Ohio.

In addition to the prison sentence, Boukzam, along with PON Management, was placed on four years of supervised release and ordered to pay more than $4.1 million in restitution to FirstMerit.