A suburban Chicago businessman was convicted yesterday by a federal jury for orchestrating elaborate fraud schemes that netted over $55 million in fraudulent commercial loans and COVID-19 relief funds, marking another significant victory in the Justice Department’s ongoing crackdown on pandemic-related fraud.
Rahul Shah, 56, of Evanston, who owned and operated several information technology companies in the Chicago area, was found guilty on 16 federal charges after prosecutors demonstrated how he systematically defrauded federally insured financial institutions and exploited the Small Business Administration’s Paycheck Protection Program (PPP).
The conviction represents one of the more complex fraud cases to emerge from the pandemic era, involving not only traditional bank fraud but also the misuse of emergency relief programs designed to help struggling businesses during the COVID-19 crisis.
According to court documents and evidence presented at trial, Shah’s fraudulent activities involved multiple layers of deception. He inflated deposits on bank statements, overstated revenues on balance sheets, and created entirely fabricated audited financial statements complete with forged signatures to secure commercial loans and lines of credit.
The PPP fraud component of Shah’s scheme was particularly sophisticated. He submitted false IRS Forms 941, which represent quarterly payroll expenses, to support his loan application. When investigators compared these documents to his company’s actual IRS and state tax filings, they discovered that Shah had reported significantly lower payroll expenses to tax authorities than what he claimed when applying for the PPP loan.
Perhaps most troubling, Shah incorporated identity theft into his fraud scheme, using the names and taxpayer identification numbers of individuals who had never received payments from his company. He then submitted fraudulent IRS documents falsely representing that his company had made payments to these individuals to inflate his apparent payroll expenses.
Conviction Details
Shah was convicted on:
- Seven counts of bank fraud
- Five counts of making false statements to a financial institution
- Two counts of money laundering
- Two counts of aggravated identity theft
The case was announced jointly by Matthew R. Galeotti, Head of the Justice Department’s Criminal Division; U.S. Attorney Andrew S. Boutros for the Northern District of Illinois; Special Agent in Charge Douglas S. DePodesta of the FBI Chicago Field Office; and Special Agent in Charge Brady Ipock of the Small Business Administration Office of Inspector General Chicago Field Office.
Shah faces severe penalties when sentenced on November 13. Each count of bank fraud and false statements to a financial institution carries a maximum sentence of 30 years in prison, while the money laundering charges carry up to 10 years each, and the aggravated identity theft counts carry up to two years each. A federal district court judge will determine the final sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The investigation was conducted by the FBI Chicago Field Office and the SBA Office of Inspector General Chicago Field Office. The prosecution team included Assistant Chief Patrick Mott and Trial Attorney Lindsey Carson of the Criminal Division’s Fraud Section, along with Assistant U.S. Attorney Jasmina Vajzovic for the Northern District of Illinois.
The case underscores the federal government’s continued commitment to pursuing those who exploited emergency relief programs during the pandemic. The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP and continues to investigate and prosecute similar cases across the country.
Comments
More From Author
A global media for the latest news, entertainment, music fashion, and more.
