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Tuesday, December 23, 2014

Local Restaurateur Sentenced to Prison in Fraud Case Used to Prop Up Failing Eatery

Posted By on Tue, Dec 23, 2014 at 11:15 AM

click to enlarge melange_logo.jpg
On Tuesday, December 16, 2014, Andrew Zelenkofske of Chagrin Falls was sentenced to 36 months in prison for defrauding former clients of over $1 million. Local diners might remember him as the garrulous owner of Melange, which operated at La Place in Beachwood from 2007 until it closed in 2011. That space is now occupied by Cedar Creek Grille.

The case was investigated by the Federal Bureau of Investigations, the Internal Revenue Service Criminal Investigations and the Treasury Inspector General for Tax Administration, who determined that Zelenkofske defrauded his victims by acquiring funds from them to invest in a biotech start-up. Those funds were in turn used to prop up his failing restaurant. Zelenkofske defrauded another victim, a former client of his accounting practice, by falsely claiming that she owed income taxes.

Making matters worse, Zelenkofske attempted to obstruct the administration of the IRS by falsifying various documents.

In addition to the prison term, U.S. District Court Judge Stewart Dalzell ordered $987,050 in restitution, three years of supervised release and a $500 special assessment.


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