Texas Trio Busted in $Millions PPP & Stimulus Scam

BEAUMONT, Texas – More than 50 individuals are facing federal charges in the Eastern District of Texas for allegedly defrauding the Paycheck Protection Program (PPP) and the Economic Impact Payments (EIP) – commonly known as stimulus checks – authorized under the CARES Act. The Department of Justice’s Criminal Division announced the sweeping crackdown, revealing a pattern of brazen theft from a program designed to keep the American economy afloat during the COVID-19 pandemic.

The CARES Act, enacted March 29, 2020, initially authorized $349 billion in forgivable PPP loans to small businesses struggling to retain employees. Congress later added over $300 billion in funding. But the lifeline was quickly exploited, with fraudsters allegedly fabricating business losses and submitting false applications. The Eastern District of Texas has prioritized these COVID-related crimes, recognizing the sheer scale of the abuse.

“When thieves and fraudsters steal CARES Act funding, they steal from all of us – the corner store, the dry cleaner, and the local grocer,” a DOJ official stated. “These are not simple or easy cases. They involve piecing together complex financial records. The speed at which we’ve brought these cases—against over 50 defendants in months—is a testament to the hard work of federal prosecutors and agents.”

Among those charged, Shashank Rai and Samuel Yates were each indicted separately in May with violations of wire fraud, mail fraud, and making false statements to a bank and the SBA to illegally obtain millions in PPP loans. More lavishly, Fahad Shah faces three counts of wire fraud, one count of making a false statement to a bank, and four counts of money laundering. Investigators allege Shah used the ill-gotten gains to purchase multiple Tesla automobiles, gamble on the stock market, and fund a lavish lifestyle. Reports indicate as many as 80 percent of legitimate loan applicants were denied due to depleted funds.

The fraud wasn’t limited to PPP loans. James Mwanza, along with Dalton Brewer and Emilee Fenton, have been indicted for identity theft related to EIPs. They allegedly used the personal information – names, birth dates, and Social Security numbers – of unsuspecting individuals to claim stimulus payments. The CARES Act allocated an estimated $300 billion for EIPs, offering up to $1,200 per adult, $2,400 for married couples, and $500 per child. Individuals earning over $99,000 (or $198,000 for joint filers) were ineligible.

The Department of Justice emphasizes the unprecedented speed of these investigations and prosecutions, crediting early law enforcement partnerships, data acquisition, and proactive measures. This aggressive pursuit of CARES Act fraud sends a clear message: those who exploit national emergencies for personal gain will be held accountable. The Eastern District of Texas continues to investigate and prosecute these crimes, aiming to recover stolen funds and ensure resources reach those who legitimately need them.

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