Ex-Restaurateur Is Ordered to Repay Investors

A Los Angeles federal judge has ordered the former head of the Woodland Hills-based Papashon restaurant chain to repay more than $3 million he took from investors for restaurants that were never built.

U.S. District Judge Steven V. Wilson ordered Jonathan C. Papa, who served as chairman of the board of Papa Holdings Inc., to pay a judgment of $3.1 million plus $422,876 in interest.

The money will be used to repay some of the $21.6 million raised from 1,300 investors who were defrauded in a scheme to raise funds for proposed restaurants in San Francisco, New York, Las Vegas and elsewhere that were never built, according to the Securities and Exchange Commission. A civil suit the agency filed against Papa in May led to last week’s ruling.

In his March 8 order, Wilson also ordered Papa to pay $110,000 in civil penalties.

Papa, who ran the company with other family members, did not contest the filing but so far has not agreed to repay the funds, said Kelly Bowers, assistant regional director for the SEC.

Papa opened his first Papashon restaurant in Pasadena in 1994, and later opened others in Beverly Hills, Encino and Long Beach. They were all closed last year.