Subsidized ‘Falls restaurateur accused of wage theft

• Share on
• 
• 
• 
• 

The A&W Restaurant in Niagara Falls owned by Muhammad Shoaib. Photo by J. Dale Shoemaker.

A Niagara Falls business owner who is seeking a second round of tax breaks for his growing portfolio of fast food restaurants cheats workers out of wages and tips, nine current and former employees have told Investigative Post. 

Muhammad Shoaib, who owns 10 fast food restaurants — including the Moe’s Southwest Grill, A&W Restaurant and Papa Johns Pizza in Niagara Falls — frequently fails to pay hourly employees overtime and managers the weekly minimum salary set in state law, six current and former employees said.

Six employees also alleged that Shoaib has withheld thousands of dollars in credit card tips from them. One of them said Shoaib’s wife, who runs the businesses alongside him, has instructed employees to use cash tips to balance the cash register when it comes up short. 

A spokesperson for the New York State Department of Labor did not address the specific allegations raised by Shoaib’s employees. The spokesperson said in general terms that failing to pay overtime, withholding tips and not paying a high enough weekly salary are violations of state labor law.

The spokesman said the agency has not received any complaints about Shoaib or his businesses. However, since that email interview, one former employee said he has filed a complaint with the labor department. That former employee had previously complained to the state attorney general for, among other things, “underpaid wages.”

Investigative Post spoke to a dozen current and former employees of Shoaib’s restaurants. Nine of them said they believe they were cheated out of pay.

“I worked, like, almost 50-hour weeks in the summertime. I was never paid overtime,” said Ari Coyle, a former employee at Moe’s Southwest Grill. “Whatever it is, they want to take the cheaper route.”

The allegations — which match the state labor department’s descriptions of “wage theft” — come as Shoaib seeks a second round of tax breaks from the Niagara County Industrial Development Agency.

In a proposal earlier this month, Shoaib requested $247,000 in property, sales and mortgage tax breaks to renovate a downtown Niagara Falls building into a five-restaurant food court that includes a Cinnabon and a Subway. Property records show Shoaib bought the 5,300-square-foot building on Rainbow Boulevard for $1 million in 2023. He currently operates a haunted house out of the building.

Shoaib previously received $172,000 in tax breaks and a $262,000 grant from the Niagara IDA in 2023 to open the Moe’s and A&W, despite telling Investigative Post at the time that he didn’t need the money. 

A public hearing to discuss Shoaib’s latest request for subsidies is scheduled for Jan. 29 at 2:15 p.m. at Niagara Falls City Hall. The IDA is scheduled to vote on the proposal at its Feb. 12 meeting.

Shoaib did not return multiple phone calls and text messages seeking an interview for this story. Instead, he sent two intermediaries — the former investigative journalist Tony Farina and the developer Frank Parlato — to speak to Investigative Post on his behalf. Both men said they believed Shoaib practiced good business ethics and never broke the law. 

Three of the 12 current and former employees interviewed by Investigative Post spoke well of Shoaib.

“If you’re questioning if we pay them overtime, yes, and it’s time and a half for every minute over 40 hours,” said Lisa Moore, a manager at Moe’s.

No overtime

Four current and former hourly employees of Shoaib’s restaurants told Investigative Post they were denied overtime pay they believed they had rightfully earned.

“There were definitely a whole lot of times [over the summer] that I and the crew, we worked over … 40 hours and we never got our extra money,” said Neveah Lecounte, an A&W employee. “If I see something that needs to be done, I have to work even if I’m off the clock.”

“Where’s my overtime incentive?” said  former Papa Johns employee Kayshaad Johnson. “From 40 hours to 60 hours, where’s my incentive?”

Two former managers said they were required to work long hours for weekly salaries that fell short of the $1,161.65 required under state law for supervisors exempt from overtime.

One of them was Ed Barnett. For about six months last year, Barnett said he worked as a delivery driver and later general manager at one of Shoaib’s Papa Johns Pizza franchises. At first, he said, it was a great job and he enjoyed running the store on Niagara Falls Boulevard.

But after several months of long hours — anywhere from 70 to 90 per week — Barnett said his young son asked him when he’d have time off. The question made him realize that he was “working too damn much,” he said. 

It was then he did the math: Given the hours he worked, his $850 weekly salary amounted to less than minimum wage if he had been an hourly employee. 

“Sooner or later, it took a toll on me, and … I realized it was taking me away from my son, my family,” Barnett said. 

He said he attempted to raise the issue with Shoaib’s wife, Hina Qureshi, who told him to leave if he wasn’t happy. He quit that day. 

“I think they owe a lot of people a lot of money,” Barnett said.

Like Barnett, the former employee who wrote to the attorney general and filed a complaint with the labor department said he regularly worked more than 40 hours a week — and as much as 80 — and was paid $800 weekly.

“I work off the clock at least 10 hours a week to help reduce labor because they make such a big deal out of labor,” the former employee wrote the attorney general.

No tips

Six employees told Investigative Post they were routinely denied tips.

While employees would distribute cash tips amongst themselves at the end of a shift, tips left via credit card were held in an account controlled by Shoaib and never distributed, the employees said.

A former employee shared documentation with Investigative Post that showed nearly $19,000 in credit card tips had accumulated between August 2023 and July 2024. They said the tips were not distributed to employees.

“We don’t get any credit card tips,” Coyle, the former Moe’s manager, said.

“It just goes straight to the owners I guess,” said Mercedes Knox, an A&W employee.

The Moe’s Southwest Grill owned by Shoaib in Niagara Falls. Photo by J. Dale Shoemaker.

Lecounte, another A&W employee, said Shoaib’s wife instructed her to use the cash tips to balance the cash register at the end of a shift if the till was short. Qureshi wrote the instructions in a text message which Lecounte shared with Investigative Post.

“Guys, if your drawer is short, unfortunately I am not responsible so don’t take money out of my deposit,” Qureshi wrote in the Nov. 19 message. “U should take it out from the staff tips, not from deposit.”

The labor department spokesperson said the law was clear on employers keeping tips: They can’t.

“An employer is not permitted to keep a tip that was provided to an employee by a customer, whether by cash or by credit card,” the spokesperson said.

Lecounte’s mother, Courtney McCalister, also used to work for Shoaib and said she was punished for raising an issue about tips.

One day last year while working at Moe’s, she said, a customer left her a $50 tip using their credit card. McCalister said she explained to the woman that employees are not permitted to keep tips left via credit card. Upset, the woman said she wanted her money back.

Her manager, McCalister said, had to find a way to give the woman her money back. She said she was sent home as a result. McCalister said she was not scheduled for another shift for six weeks.

“I have five kids,” she said. “And to send me home and not put me back on the schedule for like a month and a half, like, that was really messed up.”

Niagara Gazette reporter Mark Scheer contributed to this report.

J. Dale Shoemaker