A Texas man was sentenced today in the Eastern District of Texas to 31 months in prison and three years on probation for a scheme to fraudulently obtain more than $ 3.3 million in loans from the program. Small Business Administration (SBA) Guaranteed Paycheck Protection (PPP) under the Coronavirus Help, Relief and Economic Security Act (CARES).
According to court documents, Fahad Shah, 45, of Murphy, who pleaded guilty to wire fraud, requested about $ 3.3 million in PPP funds claiming that his family’s business, WBF Weddings by Farah Inc. (WBF), employed over 100 people and paid millions of dollars in compensation to those employees. In reality, WBF had no employees other than Shah and his wife. Based on Shah’s false statements and forged documents, an SBA-approved lender provided over $ 1.5 million in PPP loan funds to Shah. Shah then used the funds for personal gain contrary to the terms of the program, paying off his mortgage and buying two Tesla and a Mercedes, among others.
Deputy Attorney General Kenneth A. Polite Jr. of the Criminal Division of the Department of Justice; Acting US Attorney Nicholas Ganjei for the Eastern District of Texas; Inspector General Hannibal “Mike” Ware of the US Small Business Administration – Office of the Inspector General (SBA-OIG); Special Agent in charge Catherine Huber of the Federal Housing Finance Agency – Office of the Inspector General (FHFA-OIG); Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation – Office of the Inspector General (FDIC-OIG); Special Agent in Charge Christopher J. Altemus Jr. of the Dallas IRS-Criminal Investigation (IRS-CI) Field Office; and Inspector General J. Russell George of the Inspector General of the Treasury for Tax Administration (TIGTA) made the announcement.
The SBA-OIG, FHFA-OIG, FDIC-OIG, IRS-CI and TIGTA have investigated the case.
Trial attorney Della Sentilles and Louis Manzo of the Fraud Section of the Criminal Division and Assistant U.S. Attorneys Frank Coan and Bob Wells of the Eastern District of Texas continued the case.
On May 17, 2021, the Attorney General created the COVID-19 Fraud Enforcement Working Group to mobilize the resources of the Department of Justice in partnership with government agencies to strengthen efforts to combat and prevent the pandemic fraud. The Working Group strengthens efforts to investigate and prosecute the most culpable national and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud, among other methods, by scaling up and integrating mechanisms coordination, identifying resources and techniques for uncovering fraudulent actors and their programs, and sharing and leveraging information and knowledge gained from previous enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about alleged attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Enforcement (NCDF) hotline at 866-720 -5721 or via the NCDF web complaint form at https: // www. justice.gov/disaster-fraud/ncdf-disaster-complaint-form.