Cleveland Restaurateur Pleads Guilty to Misusing $846,720 in Federal Relief Funds

Marcelo Fadul Neves walked into Cuyahoga County Common Pleas Court on Monday and pleaded guilty to seven felony counts, doing so on the same day he had been scheduled to stand trial. The former owner of Crop Bistro in Cleveland's Ohio City neighborhood admitted to misusing $846,720 in federal Restaurant Revitalization Funds that prosecutors say he spent on personal expenses, debt payments, and the purchase of a second restaurant, Bistro on the Falls in Olmsted Falls, rather than the struggling business named on his application.

The detail at the core of the case is damning: when Neves applied for those federal COVID relief funds in 2021, Crop Bistro had already closed and never reopened. The space at 2357 Lorain Avenue is now home to a different restaurant, Bartelby.

Neves pleaded guilty to one count of aggravated theft, one count of theft from a person in a protected class, one count of grant theft, and four counts of passing bad checks. As part of the plea agreement, he must pay $969,315.67 in restitution, to be shared among nine victims. Sentencing is scheduled for April 29.

The bad-check charges represent a separate layer of harm. Prosecutors say Neves wrote checks totaling more than $140,000 between 2020 and 2024, including payments to his own restaurant employees that bounced. Lisette Ponce, who worked at Bistro on the Falls, told News 5 last year that a single month on the job drained her bank account after Neves' checks came back unpaid. When Neves and his attorney repeatedly told her he was working to repay staff, investigators now say those promises obscured a much larger financial fraud.

Ponce's reaction to his arrest captured what many of the nine victims likely felt. "It is a small sigh of relief to know that they were finally able to find him and bring him in," she said. "However, this is not closure for us. I think there's still a lot that needs to be done. There's a lot of people that he hurt, and realistically, do I think that any of us are gonna maybe see any of our money? Probably not."

Neves was arrested on March 11, 2025 by the U.S. Secret Service Money Laundering Task Force with assistance from the Westlake Police Department, and pleaded not guilty at a March 13 arraignment when a $50,000 bond was set. The original March 2025 indictment included additional counts: telecommunications fraud, tampering with records, and six counts of passing bad checks. The charges he ultimately admitted to reflect a narrowed plea deal, though court records will determine which of the originally indicted counts were formally dismissed.

Cuyahoga County Prosecutor Michael O'Malley did not soften his assessment of the case. "We have seen numerous examples of citizens using COVID Relief Funds for improper purposes," he said. "This case is one of the most egregious."

Both restaurants Neves owned are now closed. The $969,315.67 restitution order exceeds the original RRF disbursement, folding in the bad-check losses alongside the misappropriated federal funds. Whether nine victims will actually recover that money remains the question Ponce already answered for herself.