Insurance Fraud NEWS
Failing bar torched, driving out 160 people in Philly
October 17, 2019, Philadelphia, PA
Federal arson and insurance fraud related charges have been filed against two brothers in connection with the 2018 Old City fire that displaced numerous people and businesses and shut down Chestnut Street for months, according to authorities.
United States Attorney William M. McSwain Thursday that Imad Dawara, 39, of Swathmore, and Bahaa Dawara, 31, of Woodlyn, who are brothers originally from Syria but now American citizens, were arrested and charged by Indictment on Oct. 16 at Philadelphia International Airport.
The indictment charges the defendants with planning and causing the arson of their business, RCL Management LLC, at 239-241 Chestnut St. in Philadelphia on Feb. 18, 2018 in order to get insurance money from the fire.
Both brothers have been charged with one count of conspiracy to commit arson, one count of conspiracy to use fire to commit a federal felony, one count of malicious damage by means of fire of a building used in interstate commerce, one count of using fire to commit a federal felony, four counts of wire fraud, and two counts of mail fraud.
If convicted, the brothers face a maximum possible sentence of 20 years in prison.
According to the indictment, from around December 2012 until February 18, 2018, the Dawaras owned and operated various restaurants and entertainment establishments in Philadelphia, including a restaurant and hookah lounge at 239-241 Chestnut St.
As the charges lay out, the Dawara brothers were struggling in their Chestnut Street business and had a history of fighting with their landlord.
By October 2015, the landlord sent the Dawaras a Notice of Default and Breach of Lease, citing numerous violations which included 26 citations from the Pennsylvania State Police Bureau of Liquor Control Enforcement, according to authorities. In response, the charges note that Imad Dawara threatened the landlord that he would destroy the place if the landlord attempted to evict the brothers from the premises, authorities said.
In November 2015, the Court of Common Pleas of Philadelphia County prohibited the defendants from engaging the services of a disc jockey, providing live entertainment, and allowing the use of tobacco products (including hookah) on the premises unless they had the proper permits. Also in November 2015, their landlord sent the defendants a Notice of Intent to terminate their lease.
By October 2017, the Dawara brothers stopped all business operations for RCL Management at 239-241 Chestnut St. then attempted to sell their business, according to authorities.
However, as they had failed to renew their lease or pay rent, no one would buy it, authorities said. On Jan. 31, 2018, their landlord told the brothers to vacate the premises by Feb. 2, 2018 and told them they owed more than $64,000 in overdue payments.
On the same day that the defendants were ordered to vacate the premises, the Indictment alleges that despite no longer doing any business at that location, Imad Dawara contacted an insurance broker to inquire about purchasing insurance for 239-241 Chestnut St, authorities said.
The Dawara brothers did not have an insurance policy on their business at the Chestnut Street location for more than a year, but 16 days before the fire, Imad Dawara purchased insurance, according to authorities.
In obtaining this new insurance policy, the charges allege that Imad Dawara asked the insurance broker repeatedly how he would be paid "if there was a fire" when he was signing up for the new policy. Authorities said the insurance policy purchased on Feb. 2, 2018 provided coverage in the event of an accidental fire at 239-41 Chestnut St. in the amount of $750,000, which consisted of $500,000 for property damage and $250,000 for business interruption.
The Indictment alleges that at about 3:11 a.m. on Feb. 18, 2018, a fire was intentionally started with gasoline in the basement of 239 Chestnut St., which destroyed the entire building, displaced approximately 160 people — some of whom were never been able to return — closed the 200 block of Chestnut Street for months, and closed numerous businesses, including The Best Western, The Little Lion, Gina's 45, and Capofitto Pizza & Gelato.
According to the Indictment, both Dawara brothers lied under oath about their whereabouts and activities on the night of the arson. Imad Dawara remained in the office at another business he owns (the B-Side Complex located at 939 N. Delaware Ave. in Philadelphia), while defendant Bahaa Dawara traveled to 239 Chestnut St. to start the fire in the basement.