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‘Iron Chef’ Jose Garces’ NYC Restaurant Was Part of Ponzi Scheme, Suit Says

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The celebrity chef has been in lots of financial hot water lately

Jose Garces
Jose Garces
Courtesy Jose Garces

Here’s one major reason why celebrity chef Jose Garces shuttered his Battery Park City version of Amada: The Philly-based restaurateur has been wildly underwater at several restaurants — with several lawsuits against him regarding finances and one investor couple alleging that the chef was running “a Ponzi scheme.”

Garces, who gained acclaim for tapas at the Philadelphia outpost of Amada, opened the New York location in 2016 primarily because a shuttered restaurant lost tons of money, and he “needed ways to make up that shortfall,” the chef told Philadelphia magazine in a lengthy profile. The magazine suggests that Garces had become “even less discerning in the opportunities he chose” when he pursued the NYC project due to his financial problems.

But instead of boosting the rest of his businesses, Amada in New York took way longer than predicted and cost Garces an extra $1.3 million in construction costs, he told the magazine. Then once Amada opened, it didn’t quite catch on despite Garces’ cred and appearances on TV. It closed at the end of March this year.

In a particularly dramatic lawsuit, a New Jersey couple who invested more than $2.5 million in his various restaurants alleges that the chef kept asking for money without plans to pay it back. For the New York Amada, they say that they were promised a 20 percent return on their $700,000 contribution, according to the Inquirer.

When Amada closed in March, Garces’ team simply said, “This business is not an easy one and we have certainly learned from this venture.” And in the Philadelphia profile, he still doesn’t fully admit his faults, instead blaming people working for him and the locations.

Ultimately, the magazine profile is frank (and savage) about the reality of Garces restaurants: “The truth is cruel, and it’s this: Outside the Philadelphia region, Jose Garces has mostly flopped. And locally, it’s been nine years since he offered up a bona fide hit.”

Update: In a new statement, the Garces team says that “ratings and reviews remain as strong as ever,” adding that diners “continue to be loyal.” “Our business issues are not having, and will not have, any impact on the level of service we provide to our customers,” the statement says.

Amada

200 Vesey Street, New York, NY

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