Owners of shuttered Paragon Restaurant convicted

25 minutes ago • Jim Masters Times Correspondent

HAMMOND | The owners of the shuttered Paragon Restaurant in Schererville face federal prison time following their felony convictions Monday in U.S. District Court.

A jury convicted Michael McClellan, 39, of Richton Park, Ill., of three counts of mail fraud and single counts of harboring illegal immigrants and money laundering. His wife, Tina McClellan, 37, was convicted one count of money laundering.

Tina McClellan faces up to five years in prison, and her husband faces a maximum of 70 years in prison, said Mary Hatton, spokeswoman for the U.S. attorney’s office.

Sentencing is set for Feb. 18 before Judge Philip Simon.

The McClellans were indicted a year ago on federal charges of harboring illegal immigrants working at their restaurant and making false claims to the state of Illinois over the number of children who attended T&M Daycare, which they operated in Calumet City.

The federal indictment alleged Michael McClellan harbored illegal immigrants at the Paragon and at a home he owns behind the restaurant. The McClellans were accused of using illegally derived funds to buy the home.

Michael McClellan submitted false quarterly reports that did not account for restaurant employees he had paid in cash, which the government successfully argued was all part of a scheme to defraud the Indiana Department of Workforce Development out of unemployment insurance tax contributions.

From 2006 through 2010, the McClellans received reimbursements of at least $200,000 from Illinois and the Healthy Start program by falsifying the number of children who attended T&M Daycare, court documents stated.

The case was investigated by the Internal Revenue Service Criminal Investigation, Department of Homeland Security and the U.S. Department of Labor.