The Arizona lawyer who helped an ex-mobster orchestrate the failure of a nationwide chain of Toby Keith restaurants was sentenced Monday to six months in prison.
Gregory McClure also must repay $1.3 million he admitted stealing, as part of his deal to cooperate with federal prosecutors. They are going after his former employer on fraud charges.
McClure, during the hour-long court hearing, told Arizona U.S. District Court Judge G. Murray Snow he was “ashamed and embarrassed” by his conduct.
“My life today is different than it was five years ago,” McClure said as he paused to pick up tissues and wipe away tears. “If someone told me 10 years ago I’d be standing in front of you, not as counsel of record, I wouldn’t have believed them.”
McClure is one of several people implicated in a fraud scheme that federal prosecutors say cost developers $64 million.
His admission follows an ongoing investigation by The Arizona Republic that began in 2015 and detailed how a former Mafia soldier in the Federal Witness Protection Program orchestrated the collapse of two country-themed restaurant chains.
Arizona businessman Frank Capri used restaurant licensing deals with country superstars Toby Keith and Rascal Flatts to cut deals with developers to build restaurants, and then he walked away with millions meant to pay for construction.
The Republic has identified Capri as Frank Gioia Jr., a “made man” in the notorious Lucchese crime family who was given a new identity by federal prosecutors in the 1990s after he was arrested on drug charges and agreed to ‘flip’ and testify against dozens of Mafia figures.
Capri’s father, mother, sister and brother-in-law also were given new identities through the Witness Protection Program, records show.
Attorney stole to support gambling addiction
McClure served as general counsel for Capri’s company, Boomtown Entertainment. He helped Capri craft development deals and then fight off lawsuits as restaurant construction halted and closed, sometimes within weeks of opening, records show.
The Republic’s investigation found Boomtown built 20 Toby Keith restaurants beginning in 2009 and announced plans to build 20 more that never opened. It closed 19 restaurants in about 18 months beginning in 2013. Even as restaurants went under, Capri was announcing plans to open new ones that never got built.
By 2017, judges in cities across the country ordered him or his companies to pay at least $65 million in civil judgments. It is unclear how many judgments were paid or settled.
McClure pleaded guilty in 2019 to stealing $1.3 million from the company to support his gambling addiction. McClure said he opened a bank account where he deposited “incentive” money sent to Boomtown from alcohol distributors, then diverted it into his own pockets.
As part of a cooperative agreement, federal prosecutors charged McClure with a single count of money laundering and agreed not to charge him for any other offenses related to Boomtown.
Prosecutors didn’t press for long sentence
McClure faced up to 10 years in prison. Just as the sentencing hearing began, the judge closed the courtroom. When he reopened it about 10 minutes later, Snow noted prosecutors agreed to a “downward departure” on sentencing, meaning they were not pressing for a lengthy sentence.
Snow said the extent, nature and duration of McClure’s crime warranted incarceration. In addition to six months in prison, he ordered McClure to be placed under house arrest for six months and to serve three years probation.
McClure, who voluntarily gave up his law license last year, now lives in a trailer and works mending fences on a 22,000-acre ranch in southern Arizona.
James Park, McClure’s Phoenix lawyer, said during the hearing that McClure had provided a ledger to authorities and continues to meet with them.
After McClure was caught embezzling money and left the Boomtown, he agreed to help Capri hide assets and backdate ownership paperwork, federal prosecutors said in court documents.
McClure has admitted diverting funds from Boomtown into various accounts controlled by Capri, according to prosecutors. He assisted Capri in transferring ownership of any financially viable Toby Keith restaurants to a holding company.
McClure also was a 10% owner in the Rascal Flatts restaurants, authorities said.
Ex-mobster boss also accused of fraud
Capri, 52, of Scottsdale, was arrested Feb. 5 after a federal grand jury indicted him on fraud, conspiracy and money laundering charges. He remains in custody.
Prosecutors describe Capri as a danger to the community and say he poses an extreme flight risk, with access to loose diamonds, business accounts, credit cards and artwork that could be converted quickly into cash.
He was charged along with his mother, Debbie Corvo, 68, of Cave Creek, and former business partner Chris Burka.
Capri and Corvo have pleaded not guilty. Burka, who lives outside the country, has not yet entered a plea. Corvo on Monday indicated she intends to change her plea.
Prosecutors accused the trio of funneling money meant to pay for restaurant construction at malls into their own accounts.
Authorities said they used fraudulent paperwork, fabricated contractors, forged signatures and false notary stamps to convince developers work was progressing on projects when it wasn’t.
Toby Keith and Rascal Flatts were not named in the indictment, which lists them by the initials TK and RF and refers to them as the “branded restaurants.”
Neither Keith nor Rascal Flatts was involved in the operation of the restaurants. They sold naming rights to Capri or his companies. Rascal Flatts later terminated its licensing agreement as the restaurant projects failed.
Authorities said Capri might have been the owner of some restaurants, but the businesses were not actually in his name.
“Despite Capri’s control and ownership of the various businesses, he is not formally listed as the owner on relevant incorporation and trust documentation associated with the businesses,” according to the indictment. “The majority of the businesses are listed in the name of Capri’s mother … or other nominees with ties to Capri.”
The FBI and the U.S. Department of Justice for years have declined to answer questions about Capri or the trail of financial destruction that followed him out of the Witness Protection Program.
Capri has maintained that stories about his past are “false and defamatory” but has offered no proof to support his claims.
In a 2017 letter to The Republic, Capri denied pocketing development money and described the Toby Keith closures as nothing “other than the product of a business failure.”
A pivot from Toby Keith to Rascal Flatts
The Republic in 2019 detailed how Capri pivoted from Toby Keith to Rascal Flatts restaurants. Even though his name did not appear on corporate documents tied to the Rascal Flatts restaurants, he oversaw hiring, firing, employee payments, permits, construction schedules and collection of development fees.
Secretly recorded audiotapes of Capri’s phone calls provided a vivid picture of his role. In the profanity-laced recordings obtained by The Republic, Capri threatens and intimidates developers in an attempt to squeeze cash out of the Rascal Flatts projects.
Capri used Tawny Costa, his longtime girlfriend and the mother of two of his children, to front the projects. Costa and former Arizona restaurateur Chris Burka were listed as managers on corporation filings for RF Restaurants, the Las Vegas-based company that owned and operated them.
Costa admitted in 2019 to serving as Capri’s front for the Rascal Flatts projects.
In a series of texts to The Republic, Costa said Capri and Burka set up and secretly ran the restaurant projects in her name. She said they manipulated her into putting her name on corporation and business records for restaurants.
Federal authorities do not name Costa in the indictment. They refer to her as a Capri “nominee.” They said concealing Capri’s involvement in the project allowed Burka and Costa to negotiate agreements with developers.
Capri and others created fictitious general and subcontractor entities “and attempted to legitimize these entities by incorporating them and creating contact information to further conceal the fraudulent nature” of the scheme, the indictment said.
Capri and others went so far as to use a stamp machine to create notary and signature stamps in a further attempt to legitimize the fraudulent paperwork, prosecutors said.
A cascade of failed restaurant projects
Costa is no stranger to restaurant closures.
Between them, she and Capri are behind the failure of 63 restaurant projects since 2013. The restaurants either closed after opening, were left unfinished or were never started; 39 were under Capri’s name and 24 were under Costa’s name, according to a Republic tally.
In addition to Toby Keith and Rascal Flatts, The Republic found Capri was involved with restaurants Costa operated in Tempe, San Diego, Atlanta and Boston.
He was also heavily involved in two restaurants Costa continues to run in Scottsdale and Phoenix called Parma Italian Roots.
Costa said in a Dec. 5 interview that she was the “sole owner” of Parma and Capri was not involved in the day-to-day operation of the restaurant.
The restaurant, which is located in the 3600 block of East Indian School Road, is open for business. But the Arizona Department of Liquor Licenses and Control has yet to sign off on a liquor application.
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