CHARLOTTE, NC — A federal jury in Charlotte today convicted two men of submitting fraudulent loan applications seeking more than $1.7 million in guaranteed Paycheck Protection Program (PPP) forgivable loans by the Small Business Administration (SBA) under the Coronavirus Aid, Relief and Economic Security Act (CARES), announced Dena J. King, U.S. Attorney for the Western District of North Carolina.
US Attorney King is joined in today’s announcement by Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Inspector in Charge Tommy Coke of the United States Postal Inspection Service, Atlanta Division; Special Agent in Charge Donald “Trey” Eakins of the IRS Criminal Investigation (IRS CI), Charlotte Field Office; and J. Russell George, Treasury Inspector General for Tax Administration (TIGTA).
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, North Carolina California, obtained $1.7 million worth of fraudulent products. obtained by submitting several fraudulent PPP loan applications for companies belonging to Izzat Freitekh: La Shish Kabob, La Shish Kabob Catering, Green Apple Catering and Aroma Packaging. Loan applications distorted the number of employees and salary expenditures. After obtaining the proceeds of the fraudulent loan, the defendants engaged in illegal monetary transactions with the proceeds of the scheme, including paying $30,000 to family members.
“The bad guys borrow and don’t repay, but in the case of the Freitekhs, they also lie to cover up the fraud,” U.S. Attorney King said. “This father and son duo exploited a national emergency for their own benefit and then attempted to obstruct justice to avoid punishment. A federal jury saw through their criminal schemes and now the Freitekhs will be held accountable for their actions. Protecting important taxpayer-funded programs remains a priority for my office, and together with our law enforcement counterparts, we will continue to identify and prosecute those who exploit these programs for their own gain.
“The CARES Act was intended to help people and businesses affected by the pandemic, not to line the pockets of greedy individuals. The United States Postal Inspection Service will continue to work with our partners to hold accountable those who lie and deceive the government with money for enrichment,” said the Inspector in Charge of Coke.
“While businesses suffered and did their best to weather the pandemic, others chose greed,” said Special Agent in Charge Eakins. “IRS CI will continue to use its financial expertise to track the money and recommend the prosecution of criminals profiting from a crisis.”
“Today’s results demonstrate the commitment of the Treasury Inspector General for Tax Administration to investigate and bring to justice those who attempt to corruptly interfere with the federal tax administration,” the statement said. Inspector General George. “We appreciate the work of the U.S. Attorney’s Office and our law enforcement partners in ensuring this criminal activity is held accountable.”
Izzat Freitekh was found guilty of one count of conspiracy to commit money laundering, three counts of money laundering and one count of misrepresentation. 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 misrepresentation count.
Tarik Freitekh was found guilty 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 laundering money and one count of falsification and concealment of material facts. He faces up to 30 years in prison for bank fraud, 20 years in prison for wire fraud and money laundering conspiracy, 10 years in prison for money laundering and five years in prison for falsifying material facts.
A federal district court judge will determine any sentence after considering US sentencing guidelines and other statutory factors. Law enforcement previously obtained and executed seizure warrants for more than $1.3 million in fraud proceeds, held in various accounts. The money seized was administratively confiscated by the federal government before the trial.
The United States Postal Inspection Service, IRS-CI and TIGTA investigated the matter.
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. Assistant U.S. Attorney Benjamin Bain-Creed of the U.S. Attorney’s Office Civil Division is leading the forfeiture proceedings.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to mobilize Department of Justice resources in partnership with government agencies to scale up enforcement and prevention efforts. pandemic-related fraud. The task force strengthens efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies administering relief programs to prevent fraud by augmenting and integrating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and by sharing and leveraging information and knowledge gained from previous enforcement efforts. For more information on the ministry’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 (NCDF) hotline through the NCDF’s online complaint form at address https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.