Source: United States Department of Justice News
A federal jury in the Western District of North Carolina convicted two men today for the submission of fraudulent loan applications seeking more than $1.7 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
According to evidence presented during a six-day trial, Izzat Freitekh, 55, of Waxhaw, North Carolina, and his son Tarik Freitekh, aka Tareq Freitekh, 33, whose last known residence was in Glendale, California, obtained $1.7 million by submitting multiple fraudulent PPP loan applications for companies owned by Izzat Freitekh: La Shish Kabob, La Shish Kabob Catering, Green Apple Catering, and Aroma Packaging. The loan applications misrepresented the number of employees and payroll expenses. After obtaining the fraudulent loan proceeds, the defendants engaged in unlawful monetary transactions with the proceeds of the scheme, including making $30,000 payments to family members.
Izzat Freitekh was convicted of one count of conspiracy to commit money laundering, three counts of money laundering, and one count of making false statements. He faces up to 10 years in prison for conspiracy to commit money laundering, 10 years in prison for each of the money laundering counts, and five years in prison for the false statements count.
Tarik Freitekh was convicted of one count of conspiracy to commit wire fraud, one count of bank fraud, one count of conspiracy to commit money laundering, one count of money laundering, and one count of falsifying and concealing material facts. He faces up to 30 years in prison for the bank fraud count, 20 years in prison for the wire fraud and money laundering conspiracies, 10 years in prison for the money laundering count, and five years in prison for the falsifying material facts count.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Dena J. King for the Western District of North Carolina; Inspector in Charge Tommy Coke of the U.S. Postal Inspection Service, Atlanta Division; Special Agent in Charge Donald E. Eakins of IRS Criminal Investigation (IRS-CI), Charlotte Field Office; and Special Agent in Charge Mark Morini of the U.S. Treasury Inspector General for Tax Administration (TIGTA), Southeast Field Division, made the announcement.
The US Postal Inspection Service, IRS-CI, and TIGTA investigated the case.
Trial Attorneys Joshua N. DeBold and Matt Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark Odulio of the Western District of North Carolina prosecuted the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.