The house of cards that is San Diego's The Patio Group is beginning to crumble amidst accusations by the federal government alleging a $300 million fraud by the company's founder, as three of the group's businesses have shuttered over the past week.
Over the past week, The Patio Group has shuttered the 6-month-old Himmelberg's in San Diego's East Village, the Surf Rider Pizza outpost in Crown Point, and Love Surf retail shop in Mission Beach. The company also terminated the founder of The Patio-owned Andrea's Truffles, reportedly ceasing the business mid-production. Despite the culling of certain subsidiaries, The Patio Group is apparently continuing to expand its The Patio Marketplace concept, as reported last week.
This past August, the founder of San Diego-based The Patio Group, Gina Champion-Cain, was civilly charged by the United States Federal Securities and Exchange Commission (SEC) for allegedly operating a "multi-year, $300 million scheme that defrauded approximately 50 retail investors." The complaint alleges Champion-Cain's ANI Development raised hundreds of millions of dollars from investors to make short-term, high-interest loans to parties seeking to acquire California liquor licenses, but the SEC states that the investment opportunities were a complete sham and investor funds were actually funneled to a company controlled by Champion-Cain. The government obtained a consented-to asset freeze against ANI Development LLC and its principal, and receiver Krista Freitag of E3 Advisors has been court-appointed to oversee and manage personal and business assets of Champion-Cain, including her many restaurants. It is likely that Freitag is making decisions on which businesses to continue and which to shutter based upon her review of corporate records and financials.
Locally, The Patio Group also operates The Patio on Lamont in Pacific Beach, The Patio on Goldfinch in Mission Hills, Fireside in Liberty Station, Saska's in Mission Beach, Swell Coffe Co. in Del Mar and Mission Beach, three locations of Surf Rider Pizza Co., The Patio Express market, four locations of The Patio Marketplace, and Bao Beach in Mission Beach. The fate of these businesses is unclear at this point.
