Indictment — United States v. Rahul Shah, Northern District of Illinois (Document 48)
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An Indictment in United States of America v. Rahul Shah, No. 20 CR 293, in the U.S. District Court for the Northern District of Illinois, Eastern Division, Document #: 48, filed 02/25/21 in Case 1:20-cr-00293. Count One alleges a scheme to defraud Bank A beginning in or around April 2020 and continuing until in or around May 2020 through PPP loan applications on behalf of N2N Holdings, LLC. It alleges an application on or about April 5, 2020 for approximately $441,138 and revised applications for approximately $139,000 and approximately $99,175. Counts Two through Four allege false statements to Bank A under Title 18, United States Code, Section 1014, and the last count alleges possessing and using a means of identification of another person under Section 1028A(a)(1).
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“Indictment — United States v. Rahul Shah, Northern District of Illinois (Document 48).”
Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-1-20-cr-00293-dkt-48-n-d-ill-cfd4963308/
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Case: 1:20-cr-00293 Document #: 48 Filed: 02/25/21 Page 1 of 10 PageID #:233 (
FIL ED SXB
5/2021
2/2
. BRUTO N
THOMA.SDGIS T R IC T COURT
CLERK, U .S UNITED STATES DISTRICT COIIRT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TINITED STATES OF AMERICA ) No. 20 CR 293
)
\2. ) Violations: Title 18, United States
) Code, Sections L344, L014, and 10284
RAHUL SHAH )
JUDGE DOW JR.
COUNT ONE MAGISTRATE JUDGE VALDEZ
The SPECIAL JANUARY 2020 GRAND JIIRY charges:
1. At times material to this indictment:
a. il"k A was a fi.nancial institution headquartered in Pittsburgh,
Pennsylvania, the deposits of which were insured by the Federal Deposit Insurance
Corporation.
b. The U.S. Small Business Administration ("SBA") was a United
States government agency that provid.ed support to small businesses.
c. N2N Holdings, LLC ('NzN") was a Limited tiability Company
doing business as Boardshare, wi,th a principal place of business in Evanston, Illinois.
d. NZN was owned, operated, and controlled by RAHUL SHAH'and
his spouse, Individual A, both of whom were residents of Evanston, Illinois.
e. In addition to N2N, SHAH and Individual A owned and controlled.
other information technology companies and, as a result, had access to the means of
identification, including names, social security numbers, taxpayer identifi.cation
numbers, and dates of birth, of employees, spouses of employees, and contractors of
these entities-
Case: 1:20-cr-00293 Document #: 48 Filed: 02/25/21 Page 2 of 10 PageID #:234
f. The Coronavirus Aid, Relief, and Economic Security ("CARES")
Act was a fed.eral law enacted. in or around March 2O2O and, designed to provide
emergency financial assistLnce to the millions of Americans who were suffering the
economic effects caused by the COVID-19 pand.emic. One source of relief provided by
the CARES 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.
g. In order to obtain a PPP loan, a business submitted a PPP loan
application, which was signed by an authorized representative of the business. The
PPP loan application required the business (through its authorized representative)
to acknowledge the program rufes and make certain affirmative certifications
regard.ing its eligibility. In the application, the small business's authorized
representative was required to provide, among other things, the business's average
monthly payroll expenses and. number of employees. These figures were used to
calculate the business's eligibility and the amount of money it could receive under the
PPP. In addition, businesses applying for a PPP loan were required to provide
documentation showing their payroll expenses.
h. PPP loan proceeds were required to be used by the business for
certain permissible expenses-payroll costs, interest on mortgages, rent, and
utilities. The PPP allowed the interest and principal on the PPP loan to be entirely
forgiven by the SBA if the business spent the loan proceed.s on these items within a
Case: 1:20-cr-00293 Document #: 48 Filed: 02/25/21 Page 3 of 10 PageID #:235
designated period of time and used at least a certain percentage of the PPP loan for
payroll expenses.
i. To gain access to funds through the PPP, small businesses applied
through financial institutions participating in the PPP and received. the loans directly
from those financial institutions as the lenders.
j. Participating financial institutions required applicants for PPP
loans to provide truthful information, 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.
2. Beginning in or around April 2020, and continuing until in or around.
May 2020, in the Northern District of lllinois, Eastern Division, and elsewhere,
RAHIIL SHAH,
defendant herein, and others known and unknown to the grand. jury, participated in
a scheme to defraud Bank A, and to obtain money and funds owned by and under the
custody and control of Bank A, by means of materially false and fraudulent pretenses,
representations, and promises, as further described" below.
3. It was part of the scheme that, on or about April 5, 2020, SHAH
submitted and caused to be submitted to Bank A an application on behalf of N2N for
a PPP loan in the amount of approximately $441,138, knowing that the application
contained materially false and fraudulent information regarding N2N's payroll and
number of employees.
Case: 1:20-cr-00293 Document #: 48 Filed: 02/25/21 Page 4 of 10 PageID #:236
4. It was further part of the scheme that, on or about April 5,2020, SHAH
submitted and caused to be submitted to Bank A fi.ctitious IRS Forms 941, which
SILAH knew overstated N2N's payroll expenses and number of employees.
5. It was further part of the scheme that, on or about April 5,2020, SHAH
submitted and caused to be submitted to Bank A fi.ctitious IRS Forms 1099
purporting to show payments from N2N to certain individuals, knowing that these
individuals had not received such payments from N2N, and knowing that the
fictitious IRS Forms 1099 SHAH submitted contained means of identification for
certain individuals, including such individuals' names, social security numbers, dates
of birth, and taxpayer identification numbers.
6. It was further part of the scheme that, on or about April 5,2020, SIIAH
submitted and caused to be submitted to Bank A fictitious payroll schedules, which
SIIAH knew misstated payroll disbursements that N2N made to various individuals.
7 . It was further part of the scheme that, on or about April 25,|ZOkO,SHAH
submitted and caused to be submitted to Bank A a first revised application on behalf
of N2N for a PPP loan in the amount of approximately $139,000, knowing that the
application contained materially false and foaudulent information regarding N2N's
payroll and number of employees.
8. It was further part of the scheme that, on or about April 30,202A, SHAH
resubmitted and caused to be resubmitted to Bank A the first revised application on
behalf of N2N for a PPP loan in the amount of approximately $139,000, knowing that
Case: 1:20-cr-00293 Document #: 48 Filed: 02/25/21 Page 5 of 10 PageID #:237
the application contained materially false and fraudulent information regarding
N2N's payroll and number of employees.
9. It was further part of the scheme that, on or about May 13, 2020, SHAH
submitted and caused to be submitted to Bank A a second revised application on
behalf of N2N for a PPP loan in the amount of approximately $139,000, knowing that
the application contained materially false and fraudulent information regarding
N2N's payroll and number of employees.
10. It was further part of the scheme that, on or about May 13, 2020, SHAH
submitted and caused to be submitted to Bank A fictitious IRS Forms 941, which
SIIAH knew overstated N2N's payroll expenses and number of employees.
11. It was further part of the scheme that, on or about May 18, 2020, SHAH
submitted and caused to be submitted to Bank A a third revised application on behalf
of N2N for a PPP loan in the amount of approximately $99,175, knowing that the
application contained materially false and fraudulent information regarding N2N's
payroll and number of employees.
12. In furtherance of thil scheme, SHAH represented to Bank A, in loan
applications and their supporting documentation, that certain employees and
contractors were compensated by NzN, while also simultaneously claiming in PPP
Ioan applications to other financial institutions that those same employees and
contractors were compensated by one or more other information technology
companies owned and controlled by SHAH and lndividual A.
Case: 1:20-cr-00293 Document #: 48 Filed: 02/25/21 Page 6 of 10 PageID #:238
13. It was further part of the scheme that, between on or about April 2,2020,
and on or about May 18, 2020, SHAH electronically accegsed and. caused others to
access online resources maintained by the Internal Revenue Service to obtain fed.eral
tax forms used by businesses to report payroll and other information, including IRS
Forms 941 and 1099.
14. It was further part of the scheme that SHAH misrepresented, concealed,
hid, and caused to be misrepresented, concealed, and hidden, certain material facts,
including the purposes of the scheme and the acts done in furtherance of the scheme.
15. On or about April 5, 2020, in the Northern District of Illinois, Eastern
Division, and elsewhere,
RAHUL SHAH
defendant herein, knowingly executed the scheme, and attempted. to do so, by
submitting and causing to be submitted to Bairk A, on behalf of N2N, a loan
application and supporting documentation which fraudulently inflated. N2N's
number of employees and amount of payroll.
In violation of Title 18, United States Code, Section L344.
Case: 1:20-cr-00293 Document #: 48 Filed: 02/25/21 Page 7 of 10 PageID #:239
COUNT TWO
The SPECIAL JANUARY 2020 GRAND JURY further charges:
1. Paragraph 1 of Count One is incorporated here.
2. On or about April 5, 2020, in the Northern District of Il1inois, Eastern
Division, and elsewhere,
RA}IUL SHAH,
defendant herein, knowingly made and caused to be made false statements to Bank
A, the deposits of which were insured by the Federal Deposit Insurance Corporation,
with the intent to infLuence the actions of Bank A concerning a Paycheck Protection
Program loan application, in that defendant stated:
(a) that N2N had ten employees and an average monthly payroll of
approximately $176,455;
&) that the purported IRS Forms g4l submitted with N2N's PPP
application were substantially identical to the forms N2N submitted to
the Internal Revemre Service, and that these forms accurately
represented N2N's number of employees and total wages, tips, and other
compensation paid for the second, third, and fourth quarters of 2019;
(c) that the purported IRS Forms 1099 submitted with N2N's PPP
application were substantially identical to the forms N2N submitted to
the Internal Revenue Service or provided to Individuals B-Q, and that
these forms accurately represented compensation paid by N2N to
Individuals B-Q in 2019; and
(d) that the purported monthly payroll summaries submitted with N2N's
PPP application accurately represented the identities of and
compensation paid to N2N's employees between Aprit 2019 and March
2020;
In violation of Tit1e 18, United States Code, Section 1014.
Case: 1:20-cr-00293 Document #: 48 Filed: 02/25/21 Page 8 of 10 PageID #:240
COUNT THREE
The SPECIAL JANUARY 2020 GRAND JIIRY further charges:
1. Paragraph 1 of Count One is incorporated here.
2. On or about May 13, 2020, in the Northern District of lllinois, Eastern
Division, and elsewhere,
RAHIIL SHAH,
defendant herein, knowingly made and caused to be made false statements to Bank
A, the deposits of which were insured by the Federal Deposit Insurance Corporation,
with the intent to influence the actions of Bank A concerning a Paycheck Protection
Program loan application, in that defendant stated:
(a) that N2N had ten employees and an average monthly payroll of
approximately $55,600; and
&) that the purported IRS Forms 94L submitted with N2N's PPP
application were substantially identical to the forms N2N submitted to
the Internal Revenue Service, and that these forms accurately
. represented N2N's number of employees and total wages, tips, and other
compensation paid for the second, third, and fourth quarters of 20L9;
In violation of Tit1e 18, United States Code, Section lOL4.
Case: 1:20-cr-00293 Document #: 48 Filed: 02/25/21 Page 9 of 10 PageID #:241
COUNT FOUR
The SPECIAL JANUARY 2020 GRAND JLIRY further charges:
1. Paragraph 1 of Count One is incorporated here.
2. On or about May 18, 2020, in the Northern District of Illinois, Eastern
Division, and elsewhere,
RAHUL SHAH,
defend.ant herein, knowingly made and caused to be made false statements to Bank
A, the deposits of which were insured by the Fed.eral Deposit Insurance i)orporation,
with the intent to inlLuence the actions of Bank A concerning a Paycheck Protection
Program loan application, in that defendant stated:
(a) that N2N had ten employees and an average monthly payroll of
. approximately $39,670; and
O) that the purported IRS Form 941 submitted with N2N's PPP application
was substantially identical to the form N2N submitted to the Internal
Revenue Service, and that this form accurately represented N2N's
number of employees and total wages, tips, and other compensation paid
for the first quarter of 2019;
In violation of Title 18, United States Code, Section 1014.
Case: 1:20-cr-00293 Document #: 48 Filed: 02/25/21 Page 10 of 10 PageID #:242
COUNT FIVE
The SPECIAL JANUARY 2020 GRAND JURY further charges:
1. The allegations in paragraphs 1 and 5 of Count One of this Indictment
are incorporated. here.
2. On or about April 5, 2020, in the Northern District of Illinois, Eastern
Division, and elsewhere,
RAHUL SHAH
defendant herein, and others known and. unknown to the grand jury, during and in
relation to the bank fraud offense and false statements offense charged in Counts
One and Two of this Indictment, did knowingly possess and use, and cause to be
possessed and used, without 1awfu1 authority, a means of identification of another
person, knowing that the means of identification belonged to another person, namely,
the name and taxpayer identi.fication number of Individual B;
In violation of Title 18, United States Code, Section 1028A(a)(1).
A TRUE BILL:
FOREPERSON
signed by Jason Yonan on behalf of the
UNITED STATES ATTORNEY
DANIEL KAHN
ACTING CHIEF, FRALID SECTION
CRIMINAL DIVISION
U.S. DEPARTMENT OF JUSTICE
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