CHICAGO – A suburban Chicago tax preparer has been charged with federal fraud charges for allegedly fraudulently helping clients obtain millions of dollars in loans under the Coronavirus Aid, Relief, and Economic Security Act.
HADI ISBAIH, 39, of Palos Heights, Ill., Was indicted in an indictment returned Monday to the Northern District of Illinois on four counts of wire fraud. A first court appearance is scheduled for 2:15 pm today before US Justice of the Peace Beth W. Jantz.
The indictment was announced by John R. Lausch, Jr., United States attorney for the Northern District of Illinois; Emmerson Buie, Jr., special agent in charge of the FBI Chicago field office; Tamera Cantu, Acting Special Agent in charge of the IRS Criminal Investigations Division in Chicago; and Sharon Johnson, Special Agent for the Central Region of the Office of the Inspector General of the US Small Business Administration. The government is represented by Assistant US Attorney Nicholas J. Eichenseer.
“The relief programs provided by the CARES Act were designed to help small businesses struggling to survive the COVID-19 pandemic,” United States Attorney Lausch said. “Our office is committed to working with our law enforcement partners to root out abuse of these important programs and hold anyone accountable who seeks fraudulent profit.”
“These programs were developed to help small business owners survive the devastation caused by the COVID-19 pandemic, it is unfortunate that anyone thinks they are taking advantage of these programs,” FBI SAC Buie said. “We are honored to work with our law enforcement partners to identify who these perpetrators are and ensure they pay for their crimes.”
“This indictment is an important victory for American taxpayers who play by the rules and have no tolerance for those who make up their own,” said IRS-CI Acting SAC Cantu. “Those who use the CARES Act relief funds as a free kitty steal vital lifelines from those most in need during the COVID-19 crisis and could face criminal prosecution and lengthy sentences IRS Criminal Investigation has committed our resources and is providing our financial expertise to prosecute COVID-19 frauds of all kinds, and those like Mr. Isbaih will be brought to justice.
“Forging documents to fraudulently access SBA program funds is unacceptable,” SBA-OIG SAC Johnson said. “SBA-OIG will aggressively seek evidence of fraud against SBA programs aimed at helping small businesses across the country grappling with the challenges of the pandemic. I want to thank the United States Attorney’s Office and our law enforcement partners for their dedication and commitment to ensuring that justice is served. “
Two sources of relief established by the CARES Act, which passed in March 2020, were the Paycheck Protection Program (PPP) and the Disaster Economic Injury Loan Program (EIDL). The programs enabled eligible small businesses to receive low-interest government-guaranteed loans to cover temporary loss of income.
According to the indictment, Isbaih owned and operated Flash Tax Service Inc., a tax and investment consultancy firm in Bridgeview, Ill. From April to October 2020, Isbaih submitted on behalf of hundreds of Flash Tax clients PPP and EIDL claims containing materially false claims. statements and misrepresentation about customer activities, such as gross income, expenses and number of employees, states the indictment. Isbaih’s misrepresentation and misrepresentation resulted in the disbursement of millions of dollars of fraudulently obtained PPP and EIDL funds to these customers, according to the charges.
Isbaih charged Flash Tax clients an upfront fee of around several hundred dollars before submitting the fraudulent claims on behalf of the clients, the indictment says. If customers received the PPP or EIDL funds based on these requests, Isbaih would charge customers an additional fee of around $ 1,000, the indictment says.
The public is reminded that an indictment is not proof of guilt. The defendant is presumed innocent and has the right to a fair trial during which the government bears the burden of proving his guilt beyond a reasonable doubt. Each count of wire fraud carries a sentence of up to 20 years in federal prison. If convicted, the court must impose a reasonable sentence under federal law and US sentencing guidelines.
Anyone with information about an attempted fraud involving COVID-19 can report it to the Department of Justice by calling the National Center for Disaster Fraud Hotline at 866-720-5721, or by filling out an NCDF online complaint form at https: //www.justice. gov / disaster-fraud / ncdf-disaster complaint form.