Indian-American businessman held for misusing CARES Act

iNdica News Bureau-

An Indian-American businessman of several IT companies in Chicago has been charged with COVID-19 relief fraud.

In a criminal complaint filed in the Northern District of Illinois, Rahul Shah (51) has been charged with bank fraud and providing false statements to a financial institution.

According to the complaint, Shah filed a bank loan application that sought more than $400,000 in a forgivable Paycheck Protection Program loan guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

To secure the loan amount, Shah has allegedly submitted several false documents, including IRS Forms 1099-MISC representing that the company made payments to several individuals who later confirmed to federal investigators that they had not received such payments, it said.

Besides, Shah supposedly signed and caused to be submitted to the lender what purported to be IRS Forms 941 representing his company’s quarterly payroll expenses for 2019. A comparison between the documents submitted to the lender and the company’s IRS filings revealed that Shah’s company reported significantly lower payroll expenses to the IRS, the complaint states.

Bank fraud and providing false statements are publishable by up to 30 years in prison.

“The Paycheck Protection Program was designed as a lifeline for small businesses struggling to survive the COVID-19 pandemic,” said US Attorney John Lausch.

The CARES Act was enacted on March 29, 2020, to provide emergency financial assistance to those suffering from the economic effects caused by the COVID-19 pandemic. In an effort to get the small businesses back on their feet, this Act has the authorization of up to USD349 billion in forgivable loans to enable businesses to sustain, retain, and certain other expenses, through the PPP.

Misusing this program is not only an offense to the state but a disregard for the whole community, where the intention is to divert the money from those who would need it.