La Shish owner Talal Chahine , shown here in 2004, has seen his business suffer follwing allegations of tax evasion and alleged ties to a terrorist group. Those things may have played a role in the showdown of 11 Metro Detroit La Shish restaurants.

DEARBORN - A sign from management thanking customers for their loyalty hangs from the entrance of both Dearborn La Shish restaurants — at Michigan Avenue and Oakman Boulevard and Michigan and Monroe Street.

That same sign also hangs from the chain's nine other Metro Detroit locations, as the nearly 20-year-old business went out of business Saturday night.

"...we would like to thank you for your all along loyalty, as we have been servicing for the past 19 years the Detroit Metro Area as the premier Middle East Cuisine," the sign reads. "Due to the financial struggle, the business is now closed."

The closing is largely a result of bad publicity involving the chain's owner, Talal Chahine, whom federal prosecutors linked to terrorism.

Chahine, a former Ford Motor Co. engineer, opened his first restaurant in 1989 in East Dearborn, and it grew to the 11 locations that all closed Saturday.

Stephanie Michael, whose parents reside in Dearborn, said she's disappointed by the closing because she had been a big fan of the food.

"(My sister) and one of her friend's were addicted to (La Shish)," Michael said. "But (the friend) refused to go there after the whole conspiracy with them contributing to a terrorist group."

The Dearborn locations had been members of the Dearborn Chamber of Commerce. Chamber President Jennifer Giering declined to comment on the closings.

Imad Hamad, regional director of the American-Arab Anti-Discrimination Committee (ADC), said the loss of the business is painful because La Shish was one of the first Arab-American businesses to prosper in this area and that it had a promising future.

"But you can't mix business with pleasure,' Hamad said. "Or, in this case, you can't mix business with politics."

The chain's downward spiral began in April 2005 when federal agents raided Chahine's homes, in Dearborn and Plymouth, and headquarters looking for evidence that he had created a dual set of computerized books to evade $6.9 million in federal income taxes.

U.S. Attorney Stephen Murphy, who has been handling the tax evasion portion of the case, had no comment on the closings. Calls to Chahine's attorney, Robert Forrest, had not been returned at the time of publication.

"Unfortunately, you have the investigation into the tax evasion issue that could have led to the shutdown," Hamad said. "But I don't think this should be based on that. It should be based on the quality of the food and service the restaurant provides."

In May 2006, Chahine was indicted with his then-wife, Elfat El Aouar, on tax evasion charges. By then, Chahine had fled to Lebanon, with $20 million he had skimmed from the business, authorities allege.

The same month, prosecutors filed court papers saying he was a keynote speaker in 2002 at a fund-raising event in Lebanon for Hizballah, which the U.S. government has designated as a foreign terrorist group. He later pledged to return to face charges but hasn't.

"When people hear about things like this, it can affect their psychology and make them wonder whether or not they want to continue to support an individual or a business," Hamad said.

"It becomes easier for people to turn their back on you when you've been labeled, and that's what's been happening to Arab Americans since Sept. 11 and after. But this is a sensitive issue and one that should not be judged by politics."

Since then, Chahine has been indicted for vouching for the marriage of an illegal Lebanese immigrant, Nada Prouty, who went on to get key jobs at the FBI and CIA and may have leaked sensitive information from Hizballah files to Chahine, prosecutors said. They said he vouched for Prouty to get her job at the FBI.

El Aouar, who is Prouty's sister, was sentenced last week to 90 days in prison for marriage fraud. The time is to be served simultaneously with an 18-month sentence for tax fraud. Her U.S. citizenship also was revoked.

The bad publicity caused two of Chahine's franchise owners in West Bloomfield and Ann Arbor to pull out of the chain in 2006 and rename their restaurants to remain viable.