In a recent indictment, two Illinois businessmen have been charged with fraudulently obtaining over $7.8 million in small business loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Sharhabeel Shreiteh, an accountant in Palos Hills, and Tracy Mitchell, the owner of a business in Joliet, are accused of recruiting individuals and businesses to provide personal information and then submitting fraudulent PPP loan applications on their behalf. The indictment alleges that the applications contained false statements and misrepresentations, resulting in the defendants receiving substantial amounts of money. If convicted, they could face up to 20 years in federal prison.
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Indictment of Two Illinois Businessmen
Allegations of Fraudulent Obtaining of $7.8 Million in Covid-Relief Loans
The United States Attorney’s Office for the Northern District of Illinois has announced the indictment of two Illinois businessmen, Sharhabeel Shreiteh and Tracy Mitchell. They have been charged with fraudulently obtaining over $7.8 million in small business loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The charges stem from their alleged involvement in fraudulent activities related to the federal Paycheck Protection Program (PPP), which was created to provide financial assistance to businesses affected by the Covid-19 pandemic.
Overview of the Coronavirus Aid, Relief, and Economic Security (CARES) Act
The CARES Act was enacted by the United States Congress in response to the economic impact of the Covid-19 pandemic. The Act provided various forms of financial assistance to individuals and businesses, including the Paycheck Protection Program (PPP). The PPP aimed to provide loans to small businesses to cover essential expenses, such as payroll and rent, and incentivized loan forgiveness if certain requirements were met.
Purpose of the Paycheck Protection Program (PPP)
The Paycheck Protection Program (PPP) was designed to provide much-needed financial relief to small businesses affected by the Covid-19 pandemic. The program aimed to help businesses retain their employees and cover essential expenses during these challenging times. The loans obtained through the PPP could be forgiven if the businesses met specific criteria, primarily related to the allocation of funds towards eligible expenses.
Requirements for Loan Forgiveness
To qualify for loan forgiveness under the Paycheck Protection Program (PPP), businesses had to allocate a certain percentage of the loan proceeds towards eligible expenses, such as payroll costs, rent, utilities, and mortgage interest. Additionally, businesses had to maintain employee and compensation levels to ensure loan forgiveness eligibility. The forgiveness application process required businesses to provide documentation and supporting evidence to demonstrate compliance with the forgiveness criteria.
Accusations Against Sharhabeel Shreiteh and Tracy Mitchell
Sharhabeel Shreiteh, an accountant in Palos Hills, Illinois, and Tracy Mitchell, the owner of a business in Joliet, Illinois, have been accused of engaging in fraudulent activities related to the Paycheck Protection Program (PPP). The indictment alleges that they recruited sole proprietors, self-employed individuals, and businesses to provide personal identifying information, bank statements, and other documents. They then allegedly submitted fraudulent PPP loan applications on behalf of these individuals and businesses.
Recruitment of Sole Proprietors and Self-Employed Individuals
According to the indictment, Sharhabeel Shreiteh and Tracy Mitchell recruited sole proprietors and self-employed individuals as participants in the fraudulent scheme. These individuals were likely targeted due to their status, making them eligible for PPP loans. Shreiteh and Mitchell allegedly convinced them to provide personal identifying information and financial documents to support the fraudulent applications.
Submission of Fraudulent PPP Loan Applications
The indictment alleges that Sharhabeel Shreiteh and Tracy Mitchell prepared and submitted fraudulent PPP loan applications on behalf of the recruited sole proprietors, self-employed individuals, and businesses. These applications were believed to contain numerous misrepresentations and false statements pertaining to the applicants’ payroll, income, and other expenses. By submitting these fraudulent applications, Shreiteh and Mitchell aimed to secure funds from the Paycheck Protection Program.
Misrepresentations and False Statements in the Applications
The indictment details that Sharhabeel Shreiteh and Tracy Mitchell intentionally included false information and misrepresentations in the PPP loan applications. These misrepresentations and false statements were primarily related to inflating the applicants’ payroll, income, and other expenses. By doing so, they attempted to obtain larger loan amounts and increase their chances of loan approval.
Financial Gain for Shreiteh and Mitchell
According to the indictment, Sharhabeel Shreiteh and Tracy Mitchell received financial compensation for their involvement in the fraudulent scheme. They allegedly received between $1,000 and $4,000 per successful loan application that they prepared and submitted. This financial gain was a direct result of their participation in the fraudulent obtaining of funds from the Paycheck Protection Program.
Charges Against Shreiteh and Mitchell
Sharhabeel Shreiteh has been charged with 13 counts of wire fraud, and Tracy Mitchell has been charged with ten counts of wire fraud. The charges are a result of their alleged involvement in the fraudulent obtaining of over $7.8 million in small business loans under the CARES Act. Wire fraud is a serious offense that can carry severe penalties, including up to 20 years in federal prison for each count if convicted.
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Legal Proceedings and Response
Not Guilty Plea by Tracy Mitchell
During his arraignment, Tracy Mitchell pleaded not guilty to the charges of wire fraud. An arraignment is a formal court hearing in which the defendant is informed of the charges against them and asked to enter a plea. Mitchell maintains his innocence and will proceed with his defense in court.
Arraignment Pending for Sharhabeel Shreiteh
The arraignment for Sharhabeel Shreiteh has not yet been scheduled. An arraignment is a crucial step in the legal process where the defendant is formally presented with the charges against them and has the opportunity to enter a plea. Shreiteh will have the opportunity to respond to the charges brought against him at his arraignment.
Announcement of the Indictment by Law Enforcement Agencies
The indictment against Sharhabeel Shreiteh and Tracy Mitchell was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Justin Campbell, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the FBI Chicago Field Office. The announcement signifies the culmination of a thorough investigation conducted by law enforcement agencies into the alleged fraudulent obtaining of funds from the Paycheck Protection Program.
Presumption of Innocence and Burden of Proof
It is important to remember that Sharhabeel Shreiteh and Tracy Mitchell, like all individuals accused of a crime, are presumed innocent until proven guilty. The burden of proof lies with the government, which must present evidence to convince a jury beyond a reasonable doubt of the defendants’ guilt. Both defendants have the right to a fair trial, where they can present their defense and challenge the evidence presented against them.
Potential Penalties for Wire Fraud Conviction
If Sharhabeel Shreiteh and Tracy Mitchell are convicted of wire fraud, they could face severe penalties. Each count of wire fraud carries a maximum sentence of up to 20 years in federal prison. However, the actual sentence imposed, if convicted, will depend on various factors, including the nature and extent of the fraudulent activities, the defendants’ criminal history, and other relevant considerations.
Reporting of Covid-19 Fraud
The Department of Justice encourages individuals with information about attempted Covid-19 fraud to report it. Reports can be made by calling the National Center for Disaster Fraud at (866) 720-5721 or by filing an online complaint at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. Prompt reporting of suspected fraudulent activities is crucial in protecting individuals and businesses from becoming victims of fraud and assisting law enforcement in their investigations.
Related Content and Cases
Sentencing of Cook County Man for Unemployment Insurance Fraud
In a separate case, a Cook County man was sentenced to more than five years in prison for mail fraud and aggravated identity theft. Robert Carter was found guilty of fraudulently obtaining over $1 million in unemployment insurance funds during the Covid-19 pandemic. This case serves as a reminder of the serious consequences individuals can face for engaging in fraudulent activities related to Covid-19 relief programs.
Conviction of Real Estate Developers for Embezzlement
Two real estate developers were recently convicted of conspiring to embezzle millions of dollars from the failed Washington Federal Bank in Chicago. The investigation into the collapse of Washington Federal led to criminal charges against 16 defendants. This case underscores the government’s commitment to investigating and prosecuting financial crimes that result in significant harm to financial institutions and their customers.
Sentencing of Former Railroad Employee for Fraudulent Disability Benefits
A former railroad employee was sentenced to two and a half years in federal prison for fraudulently obtaining disability benefits. Scott Carlberg was one of six defendants charged in Chicago as part of a probe into fraud involving benefit programs administered by the Railroad Retirement Board (RRB). This case highlights the government’s dedication to combating fraudulent activities that target benefit programs and exploit public resources.
Reference to Other Press Releases
For more information on ongoing cases and recent developments related to financial fraud and other federal offenses, refer to the press releases published by the U.S. Attorney’s Office for the Northern District of Illinois. These press releases offer valuable insights into the efforts of law enforcement agencies in combating crimes that pose a threat to the integrity of financial systems and the wellbeing of individuals and businesses.
Contact Information
For inquiries or additional information regarding the indictment of Sharhabeel Shreiteh and Tracy Mitchell, please contact the Northern District of Illinois U.S. Attorney’s Office at the following location and contact details:
Location: Northern District of Illinois, U.S. Attorney’s Office Address: [Address] Chicago, IL [Zip Code]
Contact Numbers: Chicago: (312) 353-5300 Rockford: (815) 987-4444
Stay Connected: Follow the official social media accounts and visit the U.S. Attorney’s Office website for the latest updates and news releases related to their work in the Northern District of Illinois.
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Source: https://www.justice.gov/usao-ndil/pr/two-illinois-businessmen-charged-78-million-covid-relief-fraud