SARATOGA SPRINGS — The owners of a Saratoga Springs hotel and several Golden Corral restaurants in upstate New York and New Jersey are being accused by Adirondack Trust Co. of misusing nearly $2 million in federal COVID-19 funds in a newly filed lawsuit.
Niral Patel and Nirmala Patel are listed as the defendants in the case as the owners of the hotel and restaurants.
They could not be reached for immediate comment Wednesday at their hotel, the Comfort Inn and Suites in Saratoga Springs. An employee said they were not available.
Nirmala is Niral’s mother, according to the lawsuit.
The lawsuit accuses the Patels of using $1.9 million from the federal Paycheck Protection Program to pay off their mortgages. The money was supposed to be used for payroll and other business expenses to keep their businesses open. In fact, 60 percent of the funds must be used for payroll expenses under the program’s regulations.
Otherwise, the money, which are potentially forgivable loans, must be paid back to the bank.
“Worse yet, the individual defendants used the PPP proceeds for personal expenses and attempted to conceal the improper use of proceeds and shield those proceeds from collection by (Adirondack Trust) and other creditors, by diverting them through a web of transfers among their various accounts,” the lawsuit states. The Daily Gazette was the first to report the lawsuit.
The Patels own two Golden Corrals in New Jersey, as well as Golden Corral restaurants in Albany, Saratoga, Queensbury, Syracuse and Poughkeepsie, the lawsuit states.
The lawsuit says the restaurants have not been open since March 18, 2020 and the Patels “have no intention of reopening” them as Golden Corral restaurants because the buffet restaurant concept has “suffered irreparable damage in the eyes of consumers” and must be “repurposed.”
The lawsuit says the Patels received a total of $1,979,600 from Adirondack Trust through the PPP and then deposited $1,924,000 into the personal checking account of Nirmala Patel before using the money for unauthorized purposes not related to the PPP.
The bank estimates that the Patels have $20 million in debts to pay off, and have been named as defendants in other lawsuits by creditors.