Nightclub owners get 9 years in prison for 2018 arson that devastated 'the best block in Old City'

Jun. 24—The co-owners of an Old City restaurant and nightclub have been sentenced to nine years in federal prison and ordered to pay more than $22 million in restitution for starting a 2018 fire that devastated a city block, displaced dozens of residents, and drove several neighboring eateries out of business.

Brothers Imad Dawara, 40, of Swarthmore, and Bahaa Dawara, 33, of Woodlyn, agreed to the punishment last year as part of a plea deal negotiated with prosecutors to resolve an indictment accusing them of setting the blaze at 239 Chestnut St. in hopes of collecting on a $750,000 insurance policy they had taken out on their business, Revolution Diner, just two weeks before the fire.

U.S. Chief District Judge Juan R. Sánchez signed off on that deal, but he made little attempt to hide his reluctance in doing so.

"Every time I think about this case, my blood boils given the huge harm to people and destruction of property in Old City," the judge told Bahaa Dawara on Thursday. "It was only by the grace of God that no one died."

And the younger brother's nervous attempts to explain himself — repeatedly calling the arson "a mistake" — only further provoked the judge's ire.

"You took gas and poured it into a basement. What did you think was going to happen? Mistake?" the judge shot back. "You were playing with fire and you never thought there was a threat to people, property, and the life of the city? You think this was a mistake?"

Ultimately, though, Sánchez set his reservations aside, citing the desire expressed by residents who lost their homes and business that sustained millions in damage to simply put the matter behind them.

Recalling the night of the blaze on a busy 2018 Presidents' Day weekend, Jessica Morris, general manager of the Best Western hotel on the block, called it "a complete disaster."

Guests forced to evacuate in the middle of the night had to wait for days before they could return to the hotel to retrieve their belongings. When they did, most found their items destroyed. Morris said most of her 25 employees lost their jobs.

"This was the best block in Old City," she said. "And it will never be the same."

Three years later, almost everyone on the block, like Morris, said they are still picking up the pieces.

It took fire crews more than nine hours to extinguish the fire, across Chestnut Street from the Museum of the American Revolution. And while no one died, two firefighters were injured, all of the residents who lived in apartments above the Dawaras' diner were forced to move, and a handful of their pets perished.

Morris' Best Western hotel remained closed for years while the company battled with insurance companies for the money needed to repair extensive smoke and water damage to the building.

Some neighboring restaurants on the block, like the popular bar and restaurant Little Lion, remain closed to this day, while the owners of the Capogiro gelato chain blamed losses sustained at a pizzeria they ran on the block, Capofitto, for their decision to shut down their entire business in 2018.

Many residents said they suspected the Dawaras from the start and described them as longtime problem tenants. Before Revolution Diner, the pair ran another dining spot and hookah lounge in the space — Barra Restaurant & B-Side — which was shut down over persistent noise complaints and their failure to obtain proper licenses.

But in the hours after the blaze, Imad Dawara claimed to be just another one of its victims.

"I had my blood there," he told The Inquirer at the time. "I'm so upset about what happened."

His brother posted news stories about the blaze on his Facebook page with three sad-face emojis.,

Agents discovered the insurance policy they had recently taken out — on the same day that their landlord had served them with an eviction notice for $64,000 in unpaid rent.

The broker who sold them the policy recalled Imad Dawara repeatedly asking exactly how he would be paid if there were a fire. And their landlord told agents that in a previous dispute over the money the brothers owed, Imad Dawara threatened to destroy the whole building.

As agents investigated the brothers, they uncovered other wrongdoing — like the income they had been hiding for years from their Delaware Avenue club by registering its ownership in the name of employees who held no equity in the business.

When employees there sued them for unpaid wages, the Dawaras blamed the fire they set on Chestnut Street, claiming it had destroyed all their business files.

Imad Dawara and his wife were also later charged with fraudulently collecting Medicaid benefits during the same time they were lying about their income, marital status, and their $500,000 Swarthmore home.

In addition to the $22 million they agreed to pay to victims of the arson, their deal requires Imad Dawara to pay an additional $215,000 for his tax and Medicaid fraud, while Bahaa Dawara owes an additional $209,000 to the IRS.

Imad's wife, Abeer Naim, was sentenced to three years' probation for the Medicaid fraud earlier this year.

As he signed off on the agreement Thursday, Sánchez acknowledged it's unlikely the brothers will ever be able to repay the sums they owe.

But, said Assistant U.S. Attorney Jeanine Linehan, some progress toward that total has already been made. The brothers have come up with $1 million by agreeing to the sale of seven properties they own, starting with Imad Dawara's $500,000 home.

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