Date: February 25, 2021 Contact: email@example.com PHILADELPHIA — Acting United States Attorney Jennifer Arbittier Williams announced that Imad Dawara of Swathmore, PA, and Bahaa Dawara of Woodlyn, PA, both entered pleas of guilty today before United States District Court Chief Judge Juan R. Sanchez to charges of conspiracy to commit arson and conspiracy to defraud the United States. In pleading guilty, the defendants admitted to planning and causing the arson of their business, RCL Management LLC, at 239-241 Chestnut Street in Philadelphia a little more than three years ago on February 18, 2018, and to evading the assessment of their income tax liabilities from 2015-2017. Imad Dawara also admitted to fraud in connection with his receipt of health care and other government benefits including Medicaid, SNAP and TANF. From around December 2012 until February 18, 2018, the defendants owned and operated various restaurants and entertainment establishments in Philadelphia, including a restaurant and hookah lounge at 239-241 Chestnut Street. As detailed in the Indictment, the Dawara brothers were struggling in their Chestnut Street business and had a years-long history of fighting with their landlord. By October 2017, the Dawara brothers had ceased all business operations at the Chestnut Street location and attempted to sell the business, but as they had failed to renew their lease or pay rent, no one would buy it. On January 31, 2018, their landlord directed the defendants to vacate the premises by February 2, 2018 and advised them that they owed over $64,000 in overdue payments. Nonetheless, the Dawaras failed to vacate the premises, and on February 2, 2018, RCL Management purchased a $750,000 insurance policy providing coverage in the event of an accidental fire at 239-41 Chestnut Street. On February 18, 2018, a fire was intentionally started with gasoline in the basement of 239 Chestnut Street, which destroyed the entire building, displaced approximately 160 people, closed the 200 block of Chestnut Street for months, and closed numerous businesses. With today's guilty plea, both Dawara brothers admitted to planning and causing this fire. "Just over three years ago, the fire on Chestnut Street permanently altered many people's lives, some losing their homes and livelihoods," said U.S. Attorney Williams. "If not for the heroism of the Philadelphia Fire Department, the devastation from that night would have been unthinkable and much more extensive. Even though many victims of this fire can never be made completely whole, I hope that today's admission of guilt by the defendants gives these individuals and the City of Philadelphia at large some sense of relief and justice." "Schemes designed to evade income tax, such as those perpetrated by the Dawara brothers, are unfair to every taxpayer who obeys the law and pays his or her fair share," said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. "The Dawara brothers set out to cheat and steal from the American public and the government. Their admission of guilt today is a victory for all Americans who play by the rules." "Arson for profit or any other reason is a serious crime of violence that will not be tolerated," said Matthew Varisco, Special Agent in charge of ATF's Philadelphia Field Division. "ATF's partnership with the Philadelphia Fire Marshal's Office and the Philadelphia Police Department, whose work was instrumental in the success of this investigation, will continue to ensure the safety of our communities. I would like to thank the United States Attorney's Office for their diligent work in prosecuting this case." The case was investigated by the Internal Revenue Service – Criminal Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Philadelphia, the Philadelphia Fire Marshal, the Philadelphia Police Department, the U.S. Department of Health & Human Services - Office of the Inspector General, with assistance from the Philadelphia Parking Authority Taxi and Limousine Division, and is being prosecuted by Assistant United States Attorneys Jeanine Linehan and Katherine E. Driscoll.