Merle Hay Mall on Rascal Flatts restaurant: 'It seemed like everything was all good'
Frank Capri received witness protection and used his new identity to wreak havoc on developers who wanted Toby Keith restaurants. Then, he did it again. Patrick Breen, Arizona Republic
Merle Hay Mall wanted a Rascal Flatts restaurant. What it got was a failed project tied to a former soldier in the New York Mafia.
The fate of the Des Moines project wasn't unique. Mall owners across the country last year saw Rascal Flatts projects fall apart in a scheme involving an Arizona businessman who has made a living driving restaurants into ruin.
An investigation by the Arizona Republic found Frank Capri controlled key aspects of the restaurant projects, even though his name can't be found on public documents tied to them.
Capri is best known for the epic failure of another country-themed restaurant chain. He operated a nationwide chain of Toby Keith’s I Love this Bar and Grill restaurants that abruptly closed in 2015 amid allegations of fraud, contract breaches, unpaid rent, stiffing contractors and unpaid taxes.
Before he was accused of using his Toby Keith restaurants to defraud developers out of tens of millions of dollars, Capri was Frank Gioia Jr., a “made man” in New York City's notorious Lucchese Crime Family.
Frank Capri didn't exist until 1999, when the federal government gave him his name, Social Security number and a 1967 birthday through the Federal Witness Protection Program.
Gioia was a third-generation mobster. Mafia historians call him one of the most important government witnesses ever to testify against the mob.
His cooperation with law enforcement led to the conviction of more than 70 Mafia members — soldiers, captains, capos and bosses — in the 1990s and 2000s. He helped clear several unsolved murders.
The authorities who put Capri into the Federal Witness Protection Program won't talk about the string of financial failures and lawsuits left in his wake.
Capri has declined multiple interview requests. Through a lawyer, Capri has said stories about his past were "false and defamatory" but has offered no proof to support his claims. He denied pocketing development money and described the Toby Keith closures as nothing "other than the product of a business failure."
Why restaurant plans cratered early
Rascal Flatts restaurants were planned in Des Moines, Boise, Chicago, Cleveland, Los Angeles, Pittsburgh, Orlando, St. Louis and a dozen other cities.
Only one restaurant opened. It closed about a year later. The others never were completed.
Capri relied on his girlfriend and her business associate to front the restaurants, phone recordings, text messages, documents and interviews show. Working behind the scenes, Capri oversaw hiring, firing, employee payments, permits, construction schedules and collection of development fees.
That included workers at Merle Hay Mall.
"I made it very clear to you multiple times that as soon as these jobs pay then I pay you," Capri wrote in a June 28 text to a contractor. "Des Moines is pouring slab. Boise has stopped and should start back up in the next couple of weeks and St Louis has never started construction. I'm trying my best to push these jobs as fast as I can."
What happened at Merle Hay Mall?
Merle Hay Mall officials announced in April 2018 the restaurant would be opening in a 7,000-square-foot space near Flix Brewhouse. They promised a bar, restaurant, patio, live music and a late-summer opening.
Mall owner Liz Holland visited the one Rascal Flatts restaurant that opened in Stamford, Connecticut, the previous year before signing the lease.
“It was delicious,” Holland said. “It seemed like everything was all good.”
Mall representatives inspected the space in July 2018, about a month into construction, and didn't like what they saw, Holland said.
By August, construction delays had left the project on life support. It died when the general contractor on the project pulled his license and notified the city.
“To the extent you could say we were lucky, we were lucky,” Holland said. The project resulted in a year of lost rent on the space, but renovation made to the space will be used by a future tenant, she said
Ray Roshto is the owner of Ussher Construction in Glendale, Arizona. He said Capri hired him in 2017 to launch Rascal Flatts projects in Des Moines and four other cities.
Roshto said Capri wanted his name kept off contracts and agreed to pay Roshto through a company called RF Investments.
Tawny Costa and Chris Burka oversaw a paper empire of Rascal Flatts restaurants in Las Vegas. One or both of them were listed as managers on nearly 20 separate RF Restaurants filings with the Nevada secretary of state.
Developers didn't know Costa was Capri's longtime girlfriend and the mother of two of his children. Nor did they know Burka considered himself a minority partner with little financial control over businesses he said were structured by Costa's attorney.
In a March 5 email, Costa said she had no interest or ownership in the projects.
"I had no involvement, contact, or contractual obligation to any developer in any RF project nor am I responsible for any of the obligations of the owners of said company," she said.
Her attorney said Costa was not involved in any project negotiations and had no role in RF Restaurants' day-to-day operations.
Burka disputed her claims and said she duped him. He said Costa had all of the financial and operational control. He said he did not realize Capri was involved until much later.
A shadowy figure, a voice on the phone
Roshto said Costa and Burka were minor players compared with Capri. He provided hundreds of texts and recorded phone calls with Capri. On the calls, Capri orders contractors, dictates construction schedules and tells Roshto how to get money out of developers.
"Rascal Flatts, this was all Frank," Roshto said. "He handled all the trades (sub-contractors) and all the money."
Roshto said Capri used a sophisticated system of fake invoices and exaggerated construction schedules to squeeze as much cash as he could from each project with the least amount of work. After a few months it became clear Capri wasn't interested in finishing the projects, Roshto said.
The first — and last — Rascal Flatts restaurant opened in Stamford, Connecticut, in August 2017. It closed about a year later amid allegations that Costa and Burka's companies failed to pay more than $1.1 million in rent.
Mall developers in Gainesville, Los Angeles and Pittsburgh sued Burka and Costa's companies, winning evictions and judgments.
Rascal Flatts yanked its licensing agreement late last year. In a Jan. 11 post on Twitter, the band told fans it wanted to clear up any confusion about its involvement in the restaurants.
"Because we know you have been looking forward to enjoying our themed restaurants, we wanted to let you know that this project is no longer happening," the band tweeted.
It pointed out it wasn't "responsible for any obligations" of RF Restaurants.
Des Moines Register reporter Linh Ta contributed to this report.