Criminal Complaint — United States v. Feroz Jalal (No. 1:23-cr-00369, N.D. Ill.)

Summary

A sealed criminal complaint against Feroz Jalal, Case Number 23CR369, in the U.S. District Court for the Northern District of Illinois, filed June 25, 2023 as Document #: 1 in No. 1:23-cr-00369, charging wire fraud under Title 18, United States Code, Section 1343 in or about March 2021 and April 2021. The affidavit of FBI Special Agent Travis L. Fannin states that the defendant applied to PNC Bank on March 16, 2021 for a PPP loan for Bellezza Salon and Spa, Inc., claiming 7 employees and an average monthly payroll of $54,426, supported by IRS Forms 940 that the IRS has no record of. It states the loan of $136,064 was deposited on or about March 31, 2021, and that $120,000 was withdrawn in a single transaction on or about April 26, 2021 and moved through other accounts.

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“Criminal Complaint — United States v. Feroz Jalal (No. 1:23-cr-00369, N.D. Ill.).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/complaint-no-1-23-cr-00369-dkt-1-n-d-ill-28fdb22028/, SHA-256 b4edd184989445e0b958fb280ccab7579b640d58ed7476c9eec92bc048548726.

Full text

Case: 1:23-cr-00369 Document #: 1 Filed: 06/25/23 Page 1 of 9 PageID #:1

FIL ED
AO 91 (Rev. 11/11) Criminal Complaint Trial Attorney Daniel Griffin (312) 469-6307

5/2023
6/2 UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
. BRUTO N
THOMA.SDG
IS T R IC T COURT EASTERN DIVISION
CLERK, U.S
UNITED STATES OF AMERICA
CASE NUMBER: 23CR369
v.
UNDER SEAL
FEROZ JALAL

CRIMINAL COMPLAINT

I, the complainant in this case, state that the following is true to the best of my knowledge and belief.
In or about March 2021 and April 2021, at Chicago, in the Northern District of Illinois, Eastern Division, and
elsewhere, FEROZ JALAL, the defendant(s) violated:

Code Section Offense Description
Title 18, United States Code, Section 1343 having devised or intending to devise, a scheme to defraud,
and for obtaining money or property by means of false or
fraudulent pretenses, representations, and promises,
transmitted and caused to be transmitted by means of wire in
interstate or foreign commerce, any signs, signals, or sounds
for the purpose of executing such scheme

This criminal complaint is based upon these facts:
X Continued on the attached sheet.

TRAVIS L. FANNIN
Special Agent, FBI

Pursuant to Fed. R. Crim. P. 4.1, this Complaint is presented by reliable electronic means. The above-named agent
provided a sworn statement attesting to the truth of the Complaint and Affidavit by telephone.

Date: June 25, 2023 at 10:45am
Judge’s signature

City and state: Chicago, Illinois JEFFREY COLE, U.S. Magistrate Judge
Printed name and title
Case: 1:23-cr-00369 Document #: 1 Filed: 06/25/23 Page 2 of 9 PageID #:2

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

AFFIDAVIT

I, Travis L. Fannin, being duly sworn, state as follows:

1. I am a Special Agent with the Federal Bureau of Investigation (FBI),

and have been so employed for 4 years. My current responsibilities include the

investigation of white collar crime, including mail, wire, and bank fraud.

2. This affidavit is submitted in support of a criminal complaint alleging

that FEROZ JALAL, has violated Title 18, United States Code, Section 1343, in

connection with a Paycheck Protection Program loan he obtained as the applicant

for a business called Bellezza Salon and Spa, Inc. Because this affidavit is being

submitted for the limited purpose of establishing probable cause in support of a

criminal complaint charging JALAL with wire fraud, I have not included each and

every fact known to me concerning this investigation. I have set forth only the facts

that I believe are necessary to establish probable cause to believe that the

defendant committed the offense alleged in the complaint.

3. This affidavit is based on my personal knowledge, information

provided to me by other law enforcement agents, and information I have received

from various business records and searches of public and governmental databases.

Paycheck Protection Program loans

4. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a

federal law enacted in or around March 2020 and designed to provide emergency
Case: 1:23-cr-00369 Document #: 1 Filed: 06/25/23 Page 3 of 9 PageID #:3

assistance to the millions of Americans who are suffering the economic effects

caused by the COVID-19 pandemic. One source of relief provided by the Act was the

authorization of up to $349 billion in forgivable loans to small businesses for job

retention and certain other expenses, through a program called the Paycheck

Protection Program (“PPP”). In or around April 2020, Congress authorized over

$320 billion in additional funding for PPP loans.

5. To obtain a PPP loan, a qualifying loan applicant was required to

submit a signed PPP loan application to an approved lender. The PPP loan

application required the small business to provide financial information,

acknowledge the program rules and make certain affirmative certifications

regarding its eligibility. In the PPP loan application, the small business (through its

authorized representative) was required to state, among other things, its: (a)

average monthly payroll expenses; and (b) number of employees. These figures were

used to calculate the business’s eligibility and the amount of money it could receive

under the PPP. The small business was also required to certify that it was in

operation prior to February 15, 2020.

6. PPP loan proceeds were required to be used by the business for certain

permissible expenses – payroll costs, mortgage interest, rent, and utilities. The PPP

allowed the interest and principal on a PPP loan to be entirely forgiven by the SBA

if the business spent the loan proceeds on these items within a designated period of

time and used at least a certain percentage of the PPP loan for payroll expenses. To

obtain funds through the PPP, small businesses applied through lenders and loan

2
Case: 1:23-cr-00369 Document #: 1 Filed: 06/25/23 Page 4 of 9 PageID #:4

service providers participating in the PPP, and if approved, received the loans from

those lenders, either directly or through loan service providers. Participating

lenders and loan service providers required applicants for PPP loans to provide

truthful information about the business and its owner, including truthful

information about the business’s operating expenses, the business’s employees, and

how the PPP loan would be used, which information was material to lenders’

approval, terms, and funding of loans.

PPP loan application for Bellezza Salon and Spa, Inc.

7. According to records received from PNC Bank, a PPP loan application

was submitted on behalf of Bellezza Salon and Spa, Inc. (“Bellezza”) by FEROZ

JALAL on March 16, 2021. 1 The loan application indicated that Bellezza was an S-

Corporation that was established in 2017.

8. The loan application identified JALAL as the president and 100%

owner of Bellezza, with a social security number of xxx-xx-6186, and a home

address on Lawndale Avenue in Lincolnwood, Illinois. According to the application,

the principal place of business of Bellezza was located at 3924 W. Devon Ave,

Lincolnwood, Illinois. The application indicated that Bellezza’s taxpayer

identification number was 82-1891942, and that its business telephone number was

(773) 999-3999.

1 Records received from PNC Bank included 3 versions of the Bellezza PPP loan application

(SBA Form 2483). The first was dated March 16, 2021. The second was dated March 19,
2021. The third was dated March 24, 2021. Aside from the differing dates, the applications
are substantively identical.

3
Case: 1:23-cr-00369 Document #: 1 Filed: 06/25/23 Page 5 of 9 PageID #:5

9. According to the loan application, Bellezza had 7 employees, and its

average monthly payroll was $54,426. Based upon the PPP loan program rules,

JALAL sought a loan of $136,064, which was approximately 2.5 times Bellezza’s

purported average monthly payroll. In the application, JALAL indicated the loan

proceeds would be used for payroll, utilities, and lease/mortgage interest.

10. In the loan application, JALAL certified that the loan proceeds would

“be used to retain workers and maintain payroll; or make payments for mortgage

interest, rent, utilities, covered operations expenditures, covered property damage

costs, covered supplier costs, and covered worker protection expenditures as specified

under the Paycheck Protection Program Rules” and that he “underst[oo]d that if the

funds are knowingly used for unauthorized purposes, the federal government may

hold me legally liable, such as for charges of fraud.”

11. Two purported IRS tax documents were submitted in support of the

PPP loan application, according to records obtained from PNC Bank. One, an IRS

Form 940 (Employer’s Annual Federal Unemployment (FUTA) Tax Return) for 2020

indicated on line 3 that Bellezza’s payments to all employees totaled $653,112, and

computed its FUTA tax before adjustments as $252. The second, an IRS 940 for

2019 identically stated on line 3 that Bellezza’s payments to all employees totaled

$653,112, and computed its FUTA tax before adjustments as $252.

12. According to information obtained from the IRS, however, it has no

record that Bellezza (82-1891942) filed an IRS Form 940 for tax years 2020, 2019, or

2018. Additionally, the IRS has no record that Bellezza filed an IRS Form 1120-S

4
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(U.S. Income Tax Return for an S Corporation) for tax years 2020, 2019, or 2018.

The IRS also does not have a record indicating that Bellezza filed an IRS Form W-3

in 2020, 2019, or 2018 to report employee income to the government.

13. Additionally, the department of the Illinois state government

responsible for administering state unemployment benefits (the Illinois Department

of Employment Security) 2 reported that it has no record of Bellezza (82-1891942),

and no record of wages reported to xxx-xx-6186, the social security number of

JALAL.

14. In the Bellezza PPP loan application, JALAL directed PNC Bank to

disburse the loan proceeds to PNC bank account number xxxxxx9165. The Bellezza

PPP loan was approved and closed on or about March 30, 2021. 3

Preliminary tracing of the PPP loan fraud proceeds

15. Records obtained from PNC Bank indicate that JALAL established a

business checking account (xxxxxx9165) for Bellezza (82-1891942) at PNC Bank on

2 According to IDES website, all newly created businesses must register with IDES within

30 days of start-up. See https://ides.illinois.gov/employer-resources/taxes-reporting/are-you-
a-new-employer-register.html (last visited June 24, 2023). IDES also indicates that most
for-profit employers are required to pay unemployment insurance contributions as soon as
they have: (i) paid $1,500 in wages in a single calendar quarter, or employed one or more
persons for 20 weeks in a given calendar year; or (ii) paid $1,000 in cash wages in one
calendar quarter for domestic work; or (iii) paid $20,000 in cash wages in one calendar
quarter or employed 10 or more workers for 20 weeks in a given calendar year for farm
work. See https://ides.illinois.gov/employer-resources/taxes-reporting.html (last visited June
24, 2023).
3 At this time, PPP lenders, such as PNC Bank, transmitted borrowers’ PPP loan

applications to the SBA, which conducted an initial processing of the applications on
computer servers located the state of Oregon. After the initial processing was concluded in
Oregon, data relating to the PPP loan were sent by SBA to servers located in the state of
Virginia for further processing.

5
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March 16, 2021, the same day as the submission of the Bellezza PPP loan

application. Aside from a $150 cash opening deposit, and a debit card purchase for

$40.95 on March 29, 2021, the first transaction in the account was the deposit on or

about March 31, 2021, of the Bellezza PPP loan proceeds, which totaled $136,064.

16. According the PNC account records, a check for $5,000 payable to

JALAL was issued from the Bellezza PNC account on April 1, 2021. That check was

deposited into a personal account (account no. xxxxxx5194) at Wintrust Bank on or

about April 1, 2021, opened by JALAL on that same date. The personal identifiers

provided for JALAL on the signature card – a Lincolnwood, Illinois home address,

telephone number xxx-xxx-3999, Illinois state ID card xxxx-xxxx-346J, date of birth

in 1973, social security number xxx-xx-6186, and email account ferozjalal33@

[redacted] – match those associated with those provided to PNC Bank in connection

with Bellezza’s PPP loan 4 from PNC Bank.

17. According to PNC Bank records, on or about April 7, 2021, a check in

the amount of $1,800 was drawn from the Bellezza PNC Bank account, made

payable to an apartment building (“Apartment Building 1”) with a note indicating a

specific unit number (“Jalal Apartment 1”). According to a Google search,

Apartment Building 1 is located on the 6100 block of N. California Avenue in

Chicago, Illinois.

18. According to Chase Bank records, JALAL opened an account (account

no. xxxxx6116) on or about May 18, 2017, providing Jalal Apartment 1 at

4 The PPP loan application did not include a reference to JALAL’s Illinois state ID card.

6
Case: 1:23-cr-00369 Document #: 1 Filed: 06/25/23 Page 8 of 9 PageID #:8

Apartment Building 1 as a personal address. Aside from a different home address in

2017, the personal identifiers for JALAL associated with this Chase account –

telephone number xxx-xxx-3999, Illinois state ID card xxxx-xxxx-346J, date of birth

in 1973, social security number xxx-xx-6186 – are identical to those listed for the

Wintrust Bank account and detailed above in paragraph 16. Additionally, account

statements issued by Chase Bank for account activity during the time period

between March 12, 2021, through June 11, 2021, were mailed to the same

Lincolnwood, Illinois, home address discussed above in paragraph 16.

19. According to the PNC Bank records, the vast majority of the Bellezza

PPP loan proceeds, $120,000, were withdrawn in a single transaction on or about

April 26, 2021. According to records from Chase Bank relating to checking account

xxxx3022, in the name of Bellezza Salon and Spa, Inc. (82-1891942), a cashier’s

check issued by PNC Bank was deposited on or about April 26, 2021, for $120,000

made payable Bellezza Salon and Spa, Inc. According to the face of the PNC Bank

cashier’s check, the remitter was Bellezza Salon and Spa Inc.

20. On or about April 28, 2021, approximately two days after JALAL

deposited $120,000 of PPP loan fraud proceeds into Chase xxxx3022, JALAL

withdrew $130,000 in a single transaction from Chase xxxx3022. According to

records obtained from Wintrust Bank, a cashier’s check issued by Chase Bank for

$130,000, paid to the order of Bellezza Salon and Spa, Inc. was deposited on or

about the same day into a Wintrust business account (account number xxxxxx1839)

opened by JALAL on or about April 1, 2021, in the name of Bellezza Salon and Spa

7
Case: 1:23-cr-00369 Document #: 1 Filed: 06/25/23 Page 9 of 9 PageID #:9

Inc. According to the face of the Chase Bank cashier’s check, the remitter was

Bellezza Salon and Spa Inc.

21. Based upon the foregoing facts, I submit that there is probable cause to

believe that FEROZ JALAL committed the wire fraud offense alleged in the

Complaint.

FURTHER AFFIANT SAYETH NOT.

TRAVIS L. FANNIN
Special Agent, FBI

SWORN TO AND AFFIRMED by telephone June 25, 2023.

Honorable JEFFREY COLE
United States Magistrate Judge

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