Hadi Isbaih, COVID-Relief Fraud, Illinois 2024

Grimy Times Exclusive: Suburban Chicago Tax Preparer Charged with COVID-Relief Fraud

A suburban Chicago tax preparer has been indicted on federal fraud charges for allegedly fraudulently assisting customers in obtaining millions of dollars in loans under the Coronavirus Aid, Relief, and Economic Security Act.

Hadi Isbaih, 39, of Palos Heights, Ill., was charged in an indictment returned Monday in the Northern District of Illinois with four counts of wire fraud. An initial court appearance is scheduled for today at 2:15 p.m. before U.S. Magistrate Judge Beth W. Jantz.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Sharon Johnson, Special Agent-in-Charge of the Central Region of the U.S. Small Business Administration Office of Inspector General. The government is represented by Assistant U.S. Attorney Nicholas J. Eichenseer.

“The relief programs provided by the CARES Act were designed to assist small businesses struggling to survive the COVID-19 pandemic,” said U.S. Attorney Lausch. “Our office is committed to working with our law enforcement partners to root out abuse of these important programs and hold accountable anyone who seeks to fraudulently profit from them.”

According to the indictment, Isbaih owned and operated Flash Tax Service Inc., a tax and investment consulting business in Bridgeview, Ill. From April to October 2020, Isbaih submitted on behalf of hundreds of Flash Tax customers PPP and EIDL applications that contained materially false statements and misrepresentations about the customers’ businesses, such as gross revenues, expenses, and number of employees, the indictment states.

Isbaih charged Flash Tax customers an upfront fee of approximately several hundred dollars before he submitted the fraudulent applications on the customers’ behalf, the indictment states. If the customers received the PPP or EIDL funds based on those applications, Isbaih charged the customers an additional fee of approximately $1,000.

The two sources of relief established by the CARES Act, which was passed in March 2020, were the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan program (EIDL). The programs allowed qualifying small businesses to receive low-interest, government-backed loans to cover a temporary loss of revenue.

Hadi Isbaih, Defendant

Exact criminal charges: Four counts of wire fraud

City and state: Palos Heights, Illinois

Exact date: Monday in the Northern District of Illinois

Sentence or outcome: Currently charged, awaiting trial

Dollar amounts: Several hundred dollars upfront fee, $1,000 additional fee

Source: https://www.justice.gov/usao-ndil/pr/suburban-chicago-tax-preparer-charged-covid-relief-fraud