Sarma Melngailis & Matthew Kenney hit the tabloids because veg food is “in”
MIAMI, NEW YORK CITY––That vegan restauranteur Sarma Melngailis is doing time at Rikers Island and her former boyfriend and business partner Matthew Kenney has been sued from Maine to Bangkok might be seen as the flip side of a huge success.
Follow the money
On the one hand, the rise of vegan food to food industry significance as a “profit center” is exemplified by the reported $120 million of investment capital raised by the vegan food maker Hampton Creek, and by the enthusiasm for the development of vegan prepared foods recently reported by the market research companies Mintel and Global Data.
On the other hand, no one is raising, losing, and otherwise allegedly mismanaging millions of dollars on trendy restaurants and cooking schools that promote haggis, a traditional Scottish dish made from a sheep’s heart, liver, and lungs, mixed with onions and oatmeal.
“In” with the “in crowd”
Kenney and Melngailis are in deep poop because meatless meals are “in” with the “in crowd.”
Of the two, Kenney, eight years older, became well-known among foodies first, opening a New York City restaurant called Matthew’s in 1993, which according to Wikipedia “gained immediate notoriety for innovative Mediterranean inspired cuisine,” specifically Moroccan.
“With traction in the New York restaurant scene,” Wikipedia adds, “he continued his career by opening a group of restaurants: Mezze, Monzu, Canteen, Commune and Commissary.”
Some of these were essentially the same venture, failing repeatedly with different names. And Kenney was also involved in other restaurants and bars, most of which likewise failed.
Most investors apparently looked the other way and threw more money at Kenney, regarding the losses and failures as just typical casualties of the overall U.S. restaurant failure rate of from 44% to 59% within three years, depending on whose reckoning of the numbers one uses.
Became vegan raw foodist circa 2001
Kenney became a vegan raw foodist circa 2001, the same year he and Melngailis cofounded Commissary. That joint venture closed in March 2003.
Hit with IRS liens in 2002 reportedly totaling as much as $1.2 million, Kenney went through a personal bankruptcy, blaming his misfortunes on the New York City tourism and restaurant industry slump that followed the terrorist attacks of September 11, 2001.
“NYC’s first upscale raw food restaurant”
Kenney resurfaced in June 2004, cofounding Pure Food & Wine, billed as “New York City’s first upscale raw food restaurant,” in partnership with Melngailis and Jeffrey Chodorow of China Grill Management.
According to New York City food and celebrity journalist Allen Salkin, “The breakup of the attractive couple—who had posed together for many magazine shoots—hit the scandal sheets in July 2005, when Kenney showed up at a release party for Raw Food, Real World, the cookbook he and Melngailis cowrote, with his new 20-year-old girlfriend, Natasha Prakash, on his arm. Chodorow sided with Melngailis, and Kenney left Pure.”
Plant in Dumbo?
Kenney landed on his feet, Salkin reported for Time Out in 2006, “establishing numerous ventures under the Organic Umbrella company name,” including “a classroom and restaurant called the Plant in Dumbo,” four Blue/Green juice bars, a café at Jivamukti Yoga in New York City, and a series of juice bars located in Crunch Fitness gyms.
By 2008, having “become the black sheep of the New York food world” according to the food industry publication Grub Street, Kenney was venturing into other venues, including Winter Park, Florida, where he opened a juice bar, and Oklahoma City, where in 2009 he started a vegan cooking school.
The cooking school relocated to Santa Monica in 2012.
Kenney went on to expand his franchise, leading Vegan Potluck podcaster Tanya Flink to profile him for VegNews as recently as July 10, 2017 as “a secret superhero, traversing the globe on a mission to ‘craft the future of food,’” under the “superhero identity Plantlab, which encompasses five full-service restaurants in three countries, three cafés on opposite sides of the United States, eight global cooking schools, and a wellness retreat in Florida.”
One of those restaurants was Plant Food & Wine, of Miami Beach, Florida. Another was Plnthouse, nearby. And Kenney and those backing him in those ventures were in deep financial trouble again, reported Nancy Dahlberg and Carlos Frias in a series of investigative reports for the Miami Herald, beginning on July 15, 2017.
Sued over allegedly unpaid rent
In March 2017, Dahlberg and Frias wrote, Kenney was sued by Plant Food & Wine owner Karla Dascal, who alleged that Plant Food & Wine owed her business $1.4 million “in unpaid rent for the remainder of the five-year lease and $98,124.43 in sales tax, plus attorney’s fees and other expenses. The complaint also says Kenney violated a non-compete clause in the lease,” Dahlberg and Frias added, by opening Plnthouse, “and seeks eviction.”
In a July 21, 2017 follow-up, Dahlberg and Frias observed that “The Miami restaurants [are not] Kenney’s only financial fracas. He sold the assets of Matthew Kenney Culinary Academy to the former CEO of his Matthew Kenney Cuisine, Adam Zucker. The Miami location was shuttered last month and the company is now called PlantLab. Kenney’s presence was scrubbed from the website. Students who had paid thousands of dollars for classes were left in limbo when Miami classes were canceled and PlantLab is working to refund or credit the students, PlantLab’s spokesperson told the Herald.
Sued from Thailand to Waldo County
“In Thailand,” Dahlberg and Frias continued, “Kenney is facing legal action by the Evason Hua Hin resort, where a Matthew Kenney Culinary Academy was located from mid-July to mid-December in 2016. Through Thailand’s Court of Arbitration, the resort is seeking damages for breach of contract, early termination of the agreement under false premises, issuing a $15,000 check that bounced, and failure to transfer to the resort enrollment fees amounting to more than $100,000.
“In February of last year,” Dahlberg and Frias added, “the Internal Revenue Service sued Kenney for nearly $90,000,” in Waldo County, Maine. “That lien is still unpaid, according to the Maine Register of Deeds, and there is a second lien for $4,221 filed by the Maine Department of Labor against MK Cuisine Global in September 2016. In California, Kenney is facing a civil suit from a former culinary student.”
Kenney responded in a Facebook posting that Dascal’s firm “and/or the local media have built a case around my history of lawsuits and financial challenges,” which he attributed “the tremendous hurdles I have faced trying to build a new type of business for the plant-based market.”
Claimed Kenney, “Reality is, we have grown aggressively and have made many mistakes, but also operate a brand with tremendous vitality, innovation and passion. We opened a restaurant in London last week, and another will open in California in August. All of our independent restaurants are profitable and our gorgeous new book is at the printer now.”
Deal with a Saudi prince
Kenney did not mention a deal with Saudi prince Khaled bin Alwaleed, hailed by People for the Ethical Treatment of Animals in February 2017 and described most recently by Beth Bell of Triple Pundit on June 9, 2017.
“We wanted to open a plant-based café in the Middle East,” bin Alwaleed, 38, told Bell. “Originally, we were looking into a restaurant in Bali that does plant-based, and coincidentally at the same time we heard about Matthew Kenney. He seemed a much better fit. We looked into the licensing fees and I thought ‘Why am I paying him a fee, when I can just invest in the company?’ We invested and decided to make [Bahrain’s] Plant Café a branch of Matthew Kenney’s restaurants. We’re going to have ten more in the region by 2019.”
From One Lucky Duck to gambler
Meanwhile back in New York City, Melngailis appears to have operated Pure Food & Wine relatively uneventfully for several years after splitting with Kenney. She added a store called One Lucky Duck Juice & Takeaway to the location in 2005, and expanded the store to a second location in December 2009. A third location opened in 2013 in San Antonio, Texas, run by Melngailis’ brother Noah Melngailis.
In 2011, however, Melngailis met Anthony Strangis, described by Salkin in Vanity Fair as an “overweight, fast-food-eating gambler,” eight years younger, whom Melngailis “met via her friend Alec Baldwin’s Twitter feed.”
In July 2014, January 2015, and July 2015 Pure Food & Wine and One Lucky Duck staff were not paid on time. The second and third incidents led to wildcat strikes.
By that time Melngailis and Strangis were reportedly already on the run from creditors and, eventually, criminal charges.
Pure Food & Wine folded in July 2015. One Lucky Duck lasted another few months, but by mid-2016 even Noah Melngailis had severed his associations with the name, though he continued to run the San Antonio juice bar under the name The Good Kind.
Summarized Joshua Fechter of the San Antonio Express News in July 2016, “As One Lucky Duck’s Texas location opened in 2013, Sarma Melngailis brought her husband Strangis — introduced to employees as ‘Shane Fox’ — into the fold of her growing vegan empire, allowing him to exercise control over her various enterprises. The couple began to burn through company cash to finance casino outings, trips to Europe and lavish purchases. Sarma Melngailis transferred more than $1.6 million from business accounts to her personal bank account from January 2014 to January 2015,” according to an indictment issued in Brooklyn.
“Strangis proceeded to allegedly withdraw hundreds of thousands of dollars in cash from the account,” continued Fechter, “spending almost $1.2 million at casinos in Connecticut, more than $80,000 at high-end watch stores Rolex and Beyer, more than $70,000 at hotels in Europe and New York, and more than $10,000 on car rides with the ride-hailing app Uber.”
Domino’s & Chipotle
Picked up Salkin, in his Vanity Fair account, “They were arrested in May 2016 and extradited to Brooklyn when a Domino’s pizza order,” placed for Strangis while Melngailis “subsisted on vegan bowls from Chipotle,” led police “to the Tennessee motel where they’d fled after allegedly fleecing employees, investors, and tax collectors of around $1.5 million.”
Strangis in March 2017 pleaded guilty to four counts of fourth degree grand larceny, time served in jail and additional time until May 22, 2017, followed by five years on probation. He was also ordered to pay “around $840,000 in restitution to investors in Pure Food & Wine,” Salkin wrote.
Pleading guilty in May 2017 to charges of criminal tax fraud, grand larceny, and a scheme to defraud, Melngailis on June 21, 2017 was transported to Rikers Island to serve four months, after which she is to “cough up some $1.3 million to investors and employees she wronged,” wrote Emily Saul for the New York Post.
To make a pit bull immortal?
Why did all of this happen?
According to Salkin, “Melngailis says she had come to believe—really, really believe—that her pit bull, Leon,” adopted from a Brooklyn shelter in 2010, “was on the cusp of being made immortal. This Lazarus-ian feat, and more, would be accomplished by her husband, Strangis,” for which reason, she testified, she indulged him.
Brooklyn Supreme Court Judge Danny Chun did not buy Melngailis’ defense that Strangis “gaslighted” her into a pattern of irrational conduct.
Strangis and Melngailis are reportedly now in divorce proceedings. Melngailis, however, is said to be looking forward to her reunion with Leon upon her release, and to resuming her career as a high-end vegan restauranteur.