Ex-mobster’s partner pleads guilty to fraud
No mall owner or property developer in the country would knowingly do business with the former mobster turned restaurateur named Frank Capri. The spectacular failure of his Toby Keith restaurant chain and allegations of fraud had made his brand toxic.
So, former Arizona restaurant owner Chris Burka, told federal authorities, he teamed up with Capri’s longtime girlfriend and their Scottsdale attorney five years ago to secretly front a new country-themed restaurant scheme. To coax developers into putting money into a chain of Rascal Flatts restaurants beginning in 2016, Burka said they hid Capri’s identity through a trust, a string of limited liability companies and secretly controlled bank accounts.
By the end of 2018, the team negotiated deals in 19 cities to bring in more than $20 million, Burka said. But as the money meant to pay for construction flowed into Capri’s companies, restaurants weren’t being built.
“The purpose of the ownership structure was to protect Capri and conceal his involvement in the business,” Burka said in an April 1 plea agreement. “If developers, contractors or others were aware that Capri ... was behind the new restaurant concept, or was in any way associated with it, the business would not be able to obtain leases.”
Burka pleaded guilty to a charge of conspiracy to commit wire fraud. He is the fifth person involved in Capri’s failed Toby Keith and Rascal Flatts restaurants to cut a deal with federal prosecutors.
Burka’s admission lays out how
Burka, Costa and Richter have long traded blame for who was responsible for the failure of the Rascal Flatts restaurant projects.
Capri relied on a close-knit circle of Arizona lawyers, restaurant owners, relatives and other associates to orchestrate the failure of restaurants from coast to coast for more than five years.
Capri, who was arrested in 2020, is being held without bail on fraud, conspiracy and money laundering charges. He has pleaded not guilty.
The federal case follows a six-year investigation by The Arizona Republic that began in 2015. The Republic articles documented Capri’s past as a former Mafia soldier who got a new identity as an Arizona businessman through the Federal Witness Protection Program and used it to bilk developers out of tens of millions of dollars.
Laying out the scheme
In his plea deal, Burka said in 2013 Capri paid him $3,000 a month to secure a licensing agreement with Rascal Flatts that was formalized two years later during a meeting with band representatives in Nashville.
Burka has owned development and investment companies. He formerly operated restaurants in Tempe and Chandler and in 2008 promoted a concert tied to Super Bowl XLII featuring bigname rock, pop and country acts.
Burka said he attended the Rascal Flatts meeting with Capri and two of Capri’s lawyers, Shawn Richter of Scottsdale and Greg McClure of Phoenix.
McClure was convicted last year of embezzling $1.3 million from Capri’s company and surrendered his law license. As part of a deal with prosecutors, he turned state’s evidence against Capri.
Richter could not be reached for comment Thursday. He did not respond to multiple calls or an email about Burka’s allegations that he helped Capri deceive developers.
Richter has not been charged in the case.
Richter created companies called RF Investments LLC, each numbered to correspond to a particular Rascal Flatts restaurant, according to Burka. Richter put control of the limited liability companies under an irrevocable trust called RF Holdings.
A separate governing agreement gave the trust 75% ownership of the limited liability companies. Burka got the remaining 25%, according to the plea agreement.
Richter put the trust in the name of Capri’s longtime girlfriend, Tawny Costa, who admitted to The Republic in 2019 that she helped front the Rascal Flatts restaurants. Capri was the trust’s only beneficiary.
Burka said Richter helped negotiate contracts to build and operate the Rascal Flatts restaurants,
Both Burka and Costa were listed as managers of RF Investments and the numbered companies. Burka said he signed lease agreements with developers and Costa opened bank accounts for each of the RF companies.
“Although Capri did not deal directly with developers, he was the final and only decision-maker on all aspects of the business,” Burka said. “Richter, (Costa), I, and others acted at Capri’s direction and all parties intentionally concealed Capri’s ... involvement.”
Moving the money
Developers signed agreements to build Rascal Flatts restaurants without knowing they were doing business with Capri — or that the money they were paying for construction was going into accounts he controlled.
Burka detailed the money flow in his plea agreement.
Developers agreed to pay RF Investments for tenant improvements — or construction — that began the moment a lease was signed. From there, developers would make payments based on a percentage of completion.
Burka said he didn’t check to see if work was actually completed, and instead followed Capri’s instruction for requesting funds from mall owners and developers, which they referred to as “draws.”
“I did not always verify the draw requests or compare them with actual construction costs or invoices,” Burka said in the plea deal. “If Capri said a location was 25% complete, I calculated expenses based on a formula ... not based on verified costs.”
Capri also provided “soft costs” for draw requests that included payments to Richter, Burka said.
When general contractors stopped working on the restaurants before completion, Capri would hire construction managers for each job and deal with them directly.
“I sent the prepared draw paperwork to Capri, who then sent it to the construction manager for signature, and the construction manager then sent it back to Capri, who forwarded it to me to provide to the developers,” Burka said.
Developers approved the draw paperwork and released the tenant improvement money directly into the bank accounts Costa opened, Bruka said.
Who’s to blame?
Burka, Costa and Richter have long traded blame for who was responsible for the failure of the Rascal Flatts restaurant projects.
Each minimized their own involvement and pointed fingers at others in interviews, texts and email exchanges with The Republic in 2019.
Burka said at the time he had never met or communicated with Capri. He denied being at Capri’s beck and call and claimed Costa was his only contact at RF Investments. Burka described himself as a minority partner and said Costa controlled 100% of the business and all of the finances.
Costa put it all on Burka and Capri. In a series of texts, she said they manipulated her into putting her name on corporation and business records. She maintained she had no ownership interest in RF Investments and was not responsible for any of the company’s obligations. She referred specific questions to her attorney: Richter.
Richter was also Capri’s personal attorney. He said Burka wasn’t being forthcoming about his involvement in the RF companies.
Richter acknowledged setting up the companies and filing corporation documents but refused to discuss who ran them. He said his clients had not given him permission to disclose the owners of the company. Richter emphasized that Costa was not an owner.
Costa has not been charged in the federal fraud case. She is listed in court documents by initials and referred to as a Capri nominee.
Costa’s involvement with Capri and his restaurants dates back years. Capri not only is Costa’s business partner, but he is also the father of her two daughters.
Between them, Capri and Costa have orchestrated the failure of 65 restaurant
projects since 2013 that either closed after opening, were left unfinished or never started; 39 under Capri and 26 under Costa’s name, according to a Republic tally.
In addition to Toby Keith and Rascal Flatts, The Republic found Capri was involved in restaurants Costa operated in Phoenix, Scottsdale, Tempe, San Diego, Atlanta and Boston.
Costa in December was forced to close a Phoenix restaurant called Parma Italian Roots after an investigation by the Arizona Department of Liquor Licenses and Control.
Investigators said she provided false and misleading information on liquor applications about the true ownership of Parma, the money behind it and her involvement in Rascal Flatts and other failed restaurants.
Department officials say they are now investigating the “legality of her ownership” in a sister restaurant in Scottsdale.
Costa is also facing a robbery charge in Maricopa County. Police say she snatched two cellphones belonging to a Republic reporter during an interview at the Phoenix restaurant in 2019. Costa then pushed and shoved the reporter in an effort to flee, according to police.
Costa has described her relationship with Capri differently depending on who is asking the questions.
Costa initiated calls to The Republic in 2017 posing as other people to gather information for Capri. She later acknowledged the ruse and described herself as Capri’s girlfriend and his facilitator.
Costa claimed in a 2018 letter to the Republic that she didn’t know about Capri’s Mafia past and denied being his girlfriend.
The letter was sent at the same time Costa was helping Capri to develop Rascal Flatts restaurants.
In 2018, Costa also took over as manager for Capri’s Toby Keith restaurant in Foxborough, Massachusetts. She appeared at a public meeting to assure public officials the restaurant was in good hands. It closed for good in 2019.
The real Frank Capri
Capri’s real name is Frank Gioia Jr. He was a “made man” in the notorious Lucchese crime family when he flipped to become a government witness in the 1990s. Authorities said his testimony led to the conviction of more than 70 organized crime figures.
Capri’s father, mother,
sister
and brother-in-law also were given new identities through the Witness Protection Program, records show.
The Republic in 2017 documented Capri’s transition from gangster to witness to Arizona businessman.
Capri’s company, Boomtown Entertainment, built 20 Toby Keith restaurants beginning in 2009 and announced plans to build 20 more that never opened. It closed 19 restaurants in about 18 months. Even as restaurants went under, Capri was announcing plans to open locations that were never built.
By 2017, judges in cities across the country ordered him or his companies to pay at least $65 million in civil judgments. But Capri was already at work on his next big restaurant failure: Rascal Flatts.
Secretly recorded audiotapes of Capri’s phone calls obtained by The Republic in 2019 showed he oversaw hiring, firing, employee payments, permits, construction schedules and collection of development fees.
Neither Keith nor Rascal Flatts were involved in the operation of the restaurants. They sold naming rights to Capri or his companies. Rascal Flatts later terminated its licensing agreement as the restaurant projects failed.
The FBI and the U.S. Department of Justice for years have declined to answer questions about Capri or the trail of financial destruction that followed him out of the Witness Protection Program.
At the time of his arrest, Capri had a secret stash of assets, according to federal prosecutors. He had access to loose diamonds, business accounts, credit cards and artwork that could be converted quickly into hundreds of thousands of dollars.
Authorities said Capri enlisted close associates to funnel money from the restaurant projects into his own accounts, including his mother.
They used fraudulent paperwork, fabricated contractors, forged signatures and false notary stamps to convince developers work was progressing on projects when it wasn’t, according to prosecutors.
Capri’s mother, Debbie Corvo, of Cave Creek, pleaded guilty in 2020 to helping Capri hide assets as part of a deal with federal prosecutors.
Capri is scheduled to stand the summer.
Robert Anglen investigates consumer issues for The Republic. If you’re the victim of fraud, waste or abuse, reach him at robert.anglen@arizonarepublic.com or 602-444-8694. Follow him on Twitter @robertanglen.
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