Illinois Men Accused of Stealing $7.8M in COVID Relief

Joliet and Palos Hills are facing a reckoning as two local businessmen stand accused of pilfering over $7.8 million in COVID-19 relief funds. Sharhabeel Shreiteh, a Palos Hills accountant, and Tracy Mitchell, owner of a Joliet-based business, are named in a federal indictment unsealed this week, detailing a brazen scheme to defraud the Paycheck Protection Program (PPP). The feds allege they didn’t just exploit a system designed to *help* struggling businesses – they actively built a network of false identities and fabricated financial records to line their own pockets during a national crisis.

This isn’t a case of honest mistakes or paperwork errors. Federal prosecutors say Shreiteh and Mitchell systematically recruited individuals – sole proprietors, the self-employed, even legitimate businesses – and coerced them into providing personal and financial information. This information was then allegedly used to create and submit fraudulent PPP loan applications, riddled with lies about payroll, revenue, and business expenses. The scale of the alleged fraud is staggering; $7.8 million isn’t pocket change, it’s money desperately needed by businesses genuinely crippled by the pandemic’s economic fallout.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed in early 2020, was a massive stimulus package intended to cushion the blow of the pandemic. The PPP, a key component of the CARES Act, offered forgivable loans to small businesses to cover payroll, rent, and utilities. The program was plagued by issues from the start, with legitimate businesses facing delays and bureaucratic hurdles. But Shreiteh and Mitchell allegedly didn’t bother with the pretense of legitimacy, simply creating ghost businesses and inflating the financial details of existing ones.

According to the indictment, Shreiteh, leveraging his accounting expertise, allegedly played a central role in crafting the fraudulent applications. He wasn’t just filing paperwork; he was allegedly architecting the lies. Mitchell, meanwhile, is accused of being the recruiter, bringing in the individuals whose identities were exploited. The pair allegedly split the ill-gotten gains, pocketing a significant portion of the $7.8 million in fraudulently obtained funds. While the exact breakdown of the profits remains under investigation, sources close to the case suggest a pre-arranged commission structure was in place.

Both men face a charge of wire fraud, a federal felony carrying a maximum sentence of 20 years in prison. However, the sentencing guidelines are complex and depend on several factors, including the total amount of fraudulent funds obtained and the defendants’ prior criminal history. A conviction could also result in hefty fines, restitution orders requiring them to repay the stolen money, and potential forfeiture of any assets purchased with the fraudulent proceeds. This case highlights the vulnerability of emergency relief programs to exploitation and the lengths to which some individuals will go for financial gain, even during a public health crisis.

Tracy Mitchell has already entered a plea of not guilty and is currently awaiting trial. Sharhabeel Shreiteh’s arraignment is still pending, giving him time to assemble a legal defense. Federal prosecutors, led by the US Attorney’s Office for the Northern District of Illinois, are building their case, gathering evidence and preparing to present their findings to a jury. This isn’t just about two men facing prison time; it’s about holding accountable those who preyed on a system designed to protect the American people. The feds are urging anyone with information about COVID-19 related fraud to report it immediately.

This case is just the latest in a string of COVID-19 fraud prosecutions across the country. Last month, a Cook County man was sentenced for defrauding the unemployment insurance system, and in recent weeks, real estate developers in Chicago were convicted of embezzlement. The sheer volume of these cases underscores the scale of the fraud perpetrated during the pandemic and the ongoing efforts of law enforcement to bring the perpetrators to justice. The feds have dedicated significant resources to investigating and prosecuting COVID-19 related fraud, recognizing the immense financial impact on taxpayers.

Anyone with information related to this case or other instances of COVID-19 fraud is encouraged to contact the FBI’s tip line or the Office of Inspector General for the Small Business Administration. Reporting fraud not only helps recover stolen funds but also deters others from engaging in similar schemes. The integrity of these programs is vital, and vigilance from the public is crucial in ensuring that relief funds reach those who genuinely need them.

Source: U.S. Department of Justice