Andre Shammas, Fraud, California 2024

San Diego Man Pleads Guilty to Pandemic-Related Loan Fraud

Andre Shammas, owner of Shammas Funding Inc., pleaded guilty in federal court today to fraud charges, admitting that he submitted bogus applications for more than $5 million in pandemic-related loans intended to help struggling businesses during the pandemic.

The Coronavirus Aid, Relief, and Economic Security ("CARES") Act was enacted to provide emergency financial assistance to Americans suffering economic harm as a result of the COVID-19 pandemic. The CARES Act established the Paycheck Protection Program known as PPP, under which banks would make forgivable loans to small businesses, so that those businesses could keep their doors open and employees on their payroll.

According to court documents, Shammas solicited and recruited clients of Shammas's tax preparation business and people to apply for fraudulent PPP loans. Shammas then prepared fraudulent tax and other documentation to support fraudulent PPP loan applications. Co-conspirators then prepared and filed the PPP applications using the fraudulent documentation provided by Shammas.

Some examples include:
• One of the bogus applications submitted by Shammas and his co-conspirators was for a PPP loan on behalf of Nasser Salman and the entity LGDG (charged in federal Case No. 23-CR-0821-LL). This fraudulent PPP application generated $85,000 in PPP proceeds.
• An application for a PPP loan was submitted on behalf of Rafael Santiago and the entity Blacktie Co-Investors, Inc. (charged in federal Case No. 23-CR-01915-LAB). This fraudulent PPP application generated $117,233 in PPP proceeds.
• Another fraudulent application was submitted for a PPP loan on behalf of Wendell Pialet and the entity Hope Nuggets, LLC (charged in federal Case No. 23-CR-02156-LL). This fraudulent PPP application generated $100,000 in PPP proceeds.

To induce the Small Business Administration and banks to approve the fraudulent PPP loans, Shammas and his co-conspirators included false and fraudulent statements in the loan applications, including false representations regarding the number of employees, the average monthly payroll, and the gross receipts earned by these purported businesses.

Shammas is scheduled to be sentenced on November 18, 2024, at 9 a.m. before U.S. District Judge Thomas Whela.

Source: https://www.justice.gov/usao-sdca/pr/owner-san-diego-based-shammas-funding-inc-pleads-guilty-fraudulently-obtaining-5