Subsidized fast food

By J. Dale Shoemaker

Investigative Post

The New York Department of Labor has yet to conclude an investigation into a Niagara Falls fast food restaurateur accused of stealing wages and tips from his workers.

The state labor department investigation into Muhammad Shoaib’s businesses has been going on for 20 months, with no apparent end in sight.

Records obtained by Investigative Post said investigators found Shoaib liable for “wage underpayments” and other “violations.” Sources told Investigative Post the sum he owes to workers could total in the six figures.

The labor department won’t explain why the case hasn’t been resolved. In late July, a spokesperson declined to comment on the grounds the case is ongoing. A spokesperson did not return a request for comment Wednesday.

Nevertheless, Shoaib continues to enjoy the largess of Niagara County, where he’s opened most of his fast-food restaurants and has another tourism-related business planned.

Politicians including Niagara Falls Mayor Robert Restaino and Assemblyman Angelo Morinello pose for photos with him, and the Niagara County Industrial Development Agency continues to supply his businesses with grant money.

On Wednesday, the IDA unanimously approved a $35,000 grant for Shoaib for an “interactive entertainment destination” at 222 Rainbow Boulevard, home of a former haunted house. The attraction will include a maze, a “cave experience” and other “family-friendly” exhibits.

Shoaib listed the project cost at $350,000 and said he would hire four full-time employees. He’s opened a Subway, a Carvel ice cream stand and an Auntie Ann’s pretzel shop next door, and a Moe’s Southwest Grill, an A&W burger restaurant, a Church’s Chicken and a Papa John’s pizza shop blocks away.

All told, Shoaib has received nearly $900,000 in grants and subsidies from the IDA and City of Niagara Falls over the past three years.

Jason Krempa, chair of the IDA’s board of directors, said he questioned “the validity of any of the legal proceedings that are outstanding.”

“I firmly believe that he is an upstanding member of the community, and I would say he is an entrepreneur that is trying to make a difference in a distressed area.”

Defenses of Shoaib don’t sit well with Sean McIver, a former general manager at the A&W restaurant. McIver is among those who have accused Shoaib of wage theft. He told Investigative Post that he believes, after discussing the case with a state investigator, that he could be owed tens of thousands of dollars in unpaid wages.

Impatient with the state’s pace, McIver in August sued Shoaib, his wife who co-owns some of the businesses, A&W corporate leadership and the Niagara County IDA in federal court in an effort to win the pay he believes he’s owed.

McIver, in the lawsuit, alleges he worked 65 to 80 hours weekly at the A&W and, though he had a “salary arrangement,” is owed overtime wages he was never paid. State labor law says that salaried employees earning under $1,199.10 weekly should be paid overtime. Payroll records previously reviewed by Investigative Post indicated McIver’s weekly pay was well under that cap.

Shoaib, McIver’s lawsuit alleges, “engaged in rampant wage manipulation, tip skimming and illegal retention of customer-left tips intended for service staff” and that the IDA “willfully ignored verified complaints of wage theft and workplace abuses.”

“Instead, they continued to provide municipal grant capital and financing to Shoaib’s business operations, directly enabling and perpetuating the unconstitutional acts,” McIver’s lawsuit alleges.

Andrea Klyczek, executive director of the IDA, declined to comment on the lawsuit, which McIver filed himself. She said the IDA has “no knowledge” of the case and hadn’t been served.

Neither Shoaib nor his attorney, Matthew Miller, responded to requests for comment.

What records show

In April, the labor department supplied Investigative Post with 800 pages of documents related to the probe via the Freedom of Information Law, most of them redacted due to the investigation being open.

Still, the records detail, in part, the scope of the investigation into Shoaib and his businesses.

On Feb. 6, 2025, labor department investigators visited five of Shoaib’s restaurants: three Papa John’s franchises, the A&W and the Moe’s.

The documents indicate labor investigators collected payroll and scheduling records for dozens of employees across the restaurants, contacted workers for interviews and conducted in-person visitations.

In a September 2025 report, one labor department investigator wrote that he’d found no violations at one of Shoaib’s Papa John’s restaurants but that “wage underpayments” and other problems were found at other, unspecified restaurants.

Two sources told Investigative Post those underpayments and penalties could total in the six figures.

Wage theft cases that large are rare. Fewer than 3 percent of the wage theft cases the labor department settled between 2012 and 2024 involved sums of $100,000 or more, according to an analysis of state data by Investigative Post.

A history of subsidies

Investigative Post first reported on Shoaib’s businesses in January 2023, when he won $172,000 in tax breaks from the IDA to open the A&W and Moe’s. Fast-food establishments are banned from receiving such subsidies unless they’re located in a “distressed” Census tract or a tourism area — provisions the IDA has utilized repeatedly for Shoaib.

Critics, like then-state Senator Sean Ryan, were incensed.

“It looks like the Niagara IDA is just seeking a loophole to give away more taxpayer dollars,” said Ryan, now the mayor of Buffalo.

Shoaib at the time told Investigative Post he didn’t really need the subsidies and that “we are able to do [the project] without it as well.”

Additional subsidies and grants only piled up from there.

The IDA next gave Shoaib $262,000 in grants for the A&W and Moe’s. The City of Niagara Falls followed suit with $25,000 in grants for each business. Then came a quarter million in tax breaks for the food court in the former haunted house, $73,000 in tax abatements for a Church’s Chicken and $27,000 for a Jamba Juice and Carvel ice cream stand.

Last year, Investigative Post reported on accusations of wage theft by current and former employees. Those workers said they were not paid overtime or tips when they worked at Shoaib’s restaurants. One former employee told Investigative Post that practice was no accident.

“[Shoaib’s wife] said specifically to me, ‘No one gets overtime. I don’t want no one getting overtime. I’m not paying anyone for overtime,’” the former employee, a manager, said.

Krempa, the IDA chairman, said Wednesday that it’s only a “vocal minority” who complain about Shoaib’s business practices.

“There is clearly a need for employment in the markets that we serve,” he said. “Anyone who is adding employment … is someone we should be supporting.”