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SEC Files Suit Against Head of Restaurant Chain

May 15, 1999

WOODLAND HILLS — The Securities and Exchange Commission has filed suit against the head of the Woodland Hills-based Papashon restaurant chain, alleging that he and his company defrauded 1,300 investors out of $21.6 million in a scheme to raise money for restaurants that were never built.

Jonathan C. Papa, chairman and chief executive officer of Papa Holdings Inc., so far has agreed to a judgment that includes a permanent injunction barring any future securities violations such as the company's former "boiler room" operation in Woodland Hills, according to SEC officials. Restitution and penalties have not yet been determined.

Papa, 27, could not be reached for comment. SEC officials would not comment on his whereabouts.

At times, the operation employed up to 30 people making cold calls to investors nationwide, according to the civil complaint and officials with the SEC.

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