An Illinois businessman, Sharhabeel Shreiteh, was sentenced on March 10 to ten years in federal prison for orchestrating a scheme that defrauded the U.S. government of $14 million through fraudulent small business loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The case highlights ongoing efforts by federal authorities to address fraud in pandemic relief programs. The United States Attorney’s Office for the Northern District of Illinois has renewed its focus on investigating and prosecuting criminal fraud related to federal government entitlement and benefit programs.
According to prosecutors, Shreiteh engaged in fraudulent activity during 2020 and 2021 involving the Paycheck Protection Program (PPP), which was designed to help businesses cope with economic disruptions caused by the Covid-19 pandemic. Working as a tax preparer in Palos Hills, Illinois, Shreiteh recruited individuals and businesses to provide personal information used in more than 1,500 fraudulent PPP loan applications. These applications contained false information about business operations and finances, resulting in at least $14 million being disbursed by the government. For each successful loan application, Shreiteh received kickbacks ranging from $1,000 to $4,000.
Shreiteh used some of the proceeds for personal expenses such as home renovations and vacations within the United States. He also transferred hundreds of thousands of dollars overseas to financial institutions in the Palestinian Territories, where much of it was used to build a second home.
U.S. District Judge Martha M. Pacold ordered Shreiteh to forfeit $741,000 and pay $14 million in restitution. During sentencing, Judge Pacold said: “Any fraud against any government program, but in particular a program that was an emergency relief program, to take advantage of those emergency funds and ultimately to steal from taxpayers is a terrible thing, and it’s a very serious offense.” She added: “This was emergency money… It was supposed to help people who were suffering the effects of the Covid pandemic… [the fact] it was then sent overseas is very aggravating.”
Judge Pacold also noted evidence that Shreiteh collected unemployment benefits from Illinois and Ohio while receiving PPP funds and working as a tax preparer. “That just shows a general disregard for the law,” Judge Pacold said.
U.S. Attorney Andrew S. Boutros announced the sentence along with Adam Jobes of IRS Criminal Investigation Chicago and Douglas S. DePodesta of FBI Chicago Field Office.
Assistant U.S. Attorney Elie Zenner stated: “In America’s time of need, the defendant saw a chance to upgrade his lifestyle… His fraudulent scheme resulted in a massive loss to the federal government at a time when Americans were struggling in the pandemic and legitimate businesses needed money… This was a massive, callous fraud motivated purely by greed.”
Authorities encourage anyone with information about suspected Covid-19 fraud to report it by calling the National Center for Disaster Fraud or submitting an online complaint.
