Leo's Coney Island, the coney chain that got its start in Farmington in 1982, is facing a federal wage theft judgment, though not at its original or Farmington Hills locations.

A federal court found that the owner of four other Leo's franchises in metro Detroit kept two sets of timecards and destroyed overtime records, shortchanging 143 workers by more than $515,000.

The U.S. Department of Labor announced Thursday, July 30 that a consent judgment requires Kiriakos Vlahadamis and four franchise companies he operates to pay 143 employees $515,857 in overtime wages and damages. The restaurants must also pay $73,784 in civil penalties and $10,000 in attorney fees, bringing the total financial obligation to roughly $600,000.

The affected locations are in Clarkston, Dearborn, Livonia, and Sterling Heights. The Farmington Hills Leo's Coney Island at 33292 W. 12 Mile Rd. is not part of the enforcement action.

Leo's Coney Island, founded by brothers Peter and Leo Stassinopoulos, opened its Farmington location in 1982. That restaurant became the basis for the brand name, and the chain now has more than 70 locations across Michigan after it began franchising in 2005.

What investigators found

Federal investigators alleged Vlahadamis and his operators paid workers straight-time rates for all hours, including those beyond 40 per week, when the Fair Labor Standards Act requires time-and-one-half. To conceal the practice, the operators maintained one set of timecards for regular hours and a separate set for overtime hours. The overtime cards were regularly destroyed, according to the DOL.

The consent judgment was entered May 26, 2026, in the U.S. District Court for the Eastern District of Michigan. The Detroit Free Press reported the two sides reached a global settlement on June 15.

Second federal violation

This is not Vlahadamis' first run-in with federal labor regulators. In 2018, the same court entered a consent order prohibiting him and Leo's Coney Island Sterling Heights from future FLSA violations. The DOL's 2026 case included a contempt petition alleging he violated that earlier order.

When the DOL obtained a preliminary injunction against Vlahadamis in July 2024, Wage and Hour Division Detroit District Director Timolin Mitchell said the owner "was again denying his employees their full wages by refusing to pay overtime and keep required payroll records."

Defense attorney Maureen Rouse-Ayoub told C&G Newspapers in July 2024 that the allegations were "baseless" and that Vlahadamis intended to "vigorously defend" the case. The defendants ultimately agreed to the consent judgment rather than go to trial.

Local connection

The four legal entities named in the judgment are Sterling Ponds LLC (Leo's Coney Island #61, Sterling Heights), Clarkston Restaurant Inc. (#22), Dearborn Plaza Coney Island Inc. (#41), and Stass Restaurant Inc. (#38, Livonia).

No public comment from Vlahadamis or his attorney has been available since the June 2026 settlement. The DOL has not specified a payment deadline or compliance monitoring timeline.