Mustafa El Shehaly, Wire Fraud, Tennessee 2011

MEMPHIS, TN – In a shocking display of corruption, an Egyptian citizen has been arrested and charged with helping a Collierville company defraud the government of over $500,000.

Mustafa El Shehaly, 55, of Cairo, Egypt, was apprehended outside Chicago O'Hare International Airport on Thursday evening for his alleged role in a conspiracy to commit wire fraud. The indictment, filed in December 2011, alleges that El Shehaly conspired with American Marsh Pumps, Inc. (AMP), a Tennessee corporation headquartered in Collierville, to make false statements to a government agency, resulting in a loss of $536,750 to U.S. taxpayers.

According to the indictment, the conspirators violated several regulations established by the United States Agency for International Development (USAID) for its Commodity Import Program (CIP), an initiative designed to provide economic stimulus in the U.S. and Egypt. The program was responsible for financing the purchase of industrial water pumps.

However, the water pumps distributed by AMP were not only defective, they were manufactured in China. The defendants made the fraudulent misrepresentation that the water pumps were of U.S. source and origin. Under the USAID CIP guidelines, potential beneficiaries also had to consider offers from three different companies before making a selection. El Shehaly presented USAID with an actual bid from AMP, along with fraudulent bids from two additional companies, guaranteeing that AMP would be selected to provide industrial water pumps to the Egyptian Water Authority.

El Shehaly faces up to 20 years in federal prison if convicted. His arrest culminates more than six years of investigation, planning, and coordination by the USAID OIG, U.S. Attorney's Office for the Western District of Tennessee, Customs and Border Protection, and Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Christopher E. Cotten.

The indictment outlines the extent of the conspiracy, which involved the intentional misrepresentation of facts to the government agency responsible for overseeing the Commodity Import Program. The scheme resulted in the distribution of defective water pumps to the Egyptian Water Authority, causing significant financial losses to U.S. taxpayers.

As the investigation continues, it will be interesting to see how El Shehaly's alleged crimes will be connected to the broader scheme of corruption involving the Collierville company and other individuals involved in the conspiracy.

Source: https://www.justice.gov/usao-wdtn/pr/egyptian-citizen-charged-helping-collierville-company-defraud-government-over-500000