Superseding Indictment — United States v. Sharhabeel Shreiteh and Tracy Mitchell (Document 65)

Summary

A Superseding Indictment, returned under seal by the Special January 2023 Grand Jury in United States v. Sharhabeel Shreiteh and Tracy Mitchell, Case No. 22-CR-456, in the U.S. District Court for the Northern District of Illinois, Eastern Division, filed 09/19/23 as Document 65. It charges wire fraud under Title 18, United States Code, Section 1343. The grand jury alleges that the defendants submitted PPP loan applications with false occupations, payroll, income and expenses, including falsified Schedule C forms and invoices, causing Lenders A through I to disburse at least approximately $7.88 million. It alleges clients paid approximately $1,000 or more per successful application, and that each client was represented as having payroll of at least $90,000 per year. A forfeiture allegation seeks a personal money judgment equal to the proceeds.

Summary drafted by a model from the text of the original file linked on this page and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Text recognized from a scanned document; may contain errors.

Case: 1:22-cr-00456 Document #: 65 File DIAplapR Be 1 of 11 PagelD #:549

> [A Ta Magistrate Judge Cummings

4 023 a ‘ ‘
sep 142 UNITED STATES DISTRICT COURT Sept 14, 2023
MASG.BRUTON NORTHERN DISTRICT OF ILLINOIS
UNITED STATES OF AMERICA Case No.: 22-CR-456
Vv. Violations: Title 18, United States Code,
Section 1343
SHARHABEEL SHREITEH and
TRACY MITCHELL SUPERSEDING INDICTMENT
UNDER SEAL
COUNT ONE

The SPECIAL JANUARY 2023 GRAND JURY charges:
1. At times material to this indictment:
The Small Business Administration

a. The U.S. Small Business Administration (“SBA”) was a United
States government agency that provided support to small businesses.

The Paycheck Protection Program

b. The Coronavirus Aid, Relief, and Economic Security (“CARES”)
Act was a federal law enacted in or around March 2020 and designed to provide
emergency financial assistance to the millions of Americans who were suffering the
economic effects caused by the COVID-19 pandemic.

c. One source of relief provided by the CARES Act was the
authorization of up to $349 billion in forgivable loans to small businesses and sole
proprietors 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.
Case: 1:22-cr-00456 Document #: 65 Filed: 09/19/23 Page 2 of 11 PagelD #:550

d. To obtain a PPP loan, a sole proprietor, self-employed individual,
or business submitted a PPP loan application, which was signed by the applicant or
an authorized representative of the business. The PPP loan application required the
applicant to acknowledge the program rules and make certain affirmative
certifications regarding the eligibility of the proprietorship, individual, or business.
In the application, sole proprietors and self-employed individuals were required to
provide, among other things, their average monthly payroll. This figure was used to
calculate the applicant’s eligibility and the amount of money the sole proprietor or
self-employed individual could receive under the PPP. Applicants were also required
to make good-faith certifications, including that economic uncertainties had
necessitated their loan requests for continued business operations.

e. PPP loan proceeds were required to be used by the sole
proprietorship, self-employed individual, or 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
sole proprietorship, self-employed individual, or 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.

f. To gain access to funds through the PPP, sole proprietorships,
self-employed individuals, and small businesses applied to financial institutions
participating in the PPP and received the loans directly from those financial

institutions as the lender.
Case: 1:22-cr-00456 Document #: 65 Filed: 09/19/23 Page 3 of 11 PagelD #:551

g. Participating lenders required applicants for PPP loans to provide
truthful information about the sole proprietorship, self-employed individual, or
business and its owner, including truthful information about the applicant’s payroll,
income, operating expenses, and how the PPP loan would be used, which information
was material to lenders’ approval, terms, and funding of loans.

Defendants

a. SHARHABEEL SHREITEH was an accountant and the owner of
Financial Savvy Inc., located in Palos Hills, Illinois. SHREITEH resided in Crete,

b. TRACY MITCHELL was the owner of House of Deals, Inc. and
House of Furniture and Mattress, Inc., both located in Joliet, Illinois.

Lenders and Loan Processers

Cc. Lender A was a financial technology company that processed PPP
loan applications on behalf of financial institutions. Lender A maintained computer
servers that were located outside of ILlinois.

d. Lender B was a financial technology company that processed PPP
loan applications and issued PPP loans to qualified applicants. Lender B maintained
computer servers that were located outside of Illinois.

e. Lender C was a small business lender that issued PPP loans to
qualified applicants. Lender C maintained computer servers that were located

outside of Illinois.
Case: 1:22-cr-00456 Document #: 65 Filed: 09/19/23 Page 4 of 11 PagelD #:552

f. Lender D was a financial technology company that processed PPP
loan applications on behalf of financial institutions. Lender D maintained computer
servers that were located outside of Illinois.

g. Lender E was a financial technology company that processed PPP
loan applications on behalf of financial institutions. Lender E maintained computer
servers that were located outside of Illinois.

h. Lender F was a bank that issued PPP loan to qualified applicants.
Lender F maintained computer servers that were located outside of Illinois.

i. Lender G was a financial technology company that processed PPP
loan applications on behalf of financial institutions. Lender G maintained computer
servers that were located outside of Illinois.

j. Lender H was a financial institution that issued PPP loans to
qualified applicants. Lender H maintained computer servers that were located
outside of Illinois.

k. Lender I was a bank that issued PPP loans to qualified
applicants. Lender I maintained computer servers that were located outside of

The Scheme to Defraud
2. Beginning no later than in or around June 2020, and continuing until at
least in or around April 2021, in the Northern District of Illinois, Eastern Division,

and elsewhere,
Case: 1:22-cr-00456 Document #: 65 Filed: 09/19/23 Page 5 of 11 PagelD #:553

SHARHABEEL SHREITEH and
TRACY MITCHELL,

defendants herein, knowingly devised, intended to devise, and participated in a
scheme to defraud and to obtain money and property from government relief
programs by means of materially false and fraudulent pretenses, representations,
and promises, as further described below.

3. It was part of the scheme that SHREITEH and MITCHELL (together,
the “defendants”), for the purpose of fraudulently obtaining approximately $7.88
million in PPP funds, submitted numerous PPP loan applications and supporting
documents, on behalf of purported sole proprietors, self-employed individuals, and
businesses, including Individuals A through H, which applications and supporting
documents contained materially false statements and misrepresentations
concerning, among other things, the applicants’ occupations, payroll, income, and
expenses.

4. It was further part of the scheme that SHREITEH and MITCHELL
prepared, and submitted to Lenders A through I (together, the “Lenders”), PPP loan
applications on behalf of numerous individuals and business entities (“clients”), in
exchange for approximately $1,000 or more per successful loan application. In these
applications, the defendants falsely and fraudulently represented their clients’
occupations, income, and incurred business expenses, knowing at the time that (a)
their clients had neither earned the income nor incurred the expenses stated in the

applications; and (b) they had not asked their clients to tell them the name of their
Case: 1:22-cr-00456 Document #: 65 Filed: 09/19/23 Page 6 of 11 PagelD #:554

occupations, the amounts of income they earned, and the amounts of business
expenses they incurred.

5. It was part of the scheme that defendant MITCHELL recruited several
clients, including Individuals A, B, F, and H, to provide personal identifying
information and documents, including bank statements and social security numbers,
which information and documents SHREITEH and MITCHELL used to prepare and
submit false and fraudulent PPP loan applications in the names of those clients.
MITCHELL facilitated the preparation and submission of these fraudulent PPP loan
applications in exchange for approximately $4,000 or more per successful loan
application.

6. It was further part of the scheme that, in PPP loan applications
submitted to various lenders, including Lenders A through I, SHREITEH and
MITCHELL represented that clients were sole proprietors and eligible self-employed
individuals. As part of the scheme, SHREITEH and MITCHELL falsely represented
that those clients each had payrolls of at least $90,000 per year. SHREITEH and
MITCHELL knew at the time that the represented amount of payroll was false
because they had not obtained that information from their clients.

7. It was further part of the scheme that, to substantiate the claimed
occupations, income, and expenses of their clients, SHREITEH and MITCHELL
prepared and submitted to the Lenders, and caused to be prepared and submitted to
the Lenders, falsified Schedule C tax forms, which falsely represented their clients’

principal businesses and professions, yearly net profits, and total expenses.

6
Case: 1:22-cr-00456 Document #: 65 Filed: 09/19/23 Page 7 of 11 PagelD #:555

SHREITEH and MITCHELL knew at the time that the Schedule C forms that they
submitted had not been filed with the IRS and that they contained false and
fraudulent information about their clients’ occupations, income, and expenses
because they had not obtained that information from his clients.

8. It was further part of the scheme that, to substantiate the claimed
expenses of their clients, SHREITEH and MITCHELL prepared and submitted to the
Lenders, and caused to be prepared and submitted to the Lenders, falsified business
invoices, which documented business expenses that those clients never incurred.
SHREITEH and MITCHELL knew at the time that their clients had not incurred the
expenses documented in those invoices.

9. It was further part of the scheme that, through the submission of these
false and fraudulent PPP loan applications, SHREITEH and MITCHELL caused
Lenders A through I to disburse at least approximately $7.88 million in PPP funds to
their clients, some of which funds were used to pay SHREITEH and MITCHELL for
their preparation and submission of the fraudulent loan applications and to pay
MITCHELL for providing information about his clients to SHREITEH. SHREITEH
and MITCHELL knew at the time that their clients were not entitled to the PPP
funds that Lenders A through I disbursed.

10. It was further part of the scheme that SHREITEH and MITCHELL
misrepresented, concealed, and hid, and caused to be misrepresented, concealed, and
hidden, certain material facts, including the acts and purposes of the acts done in

furtherance of the scheme.
Case: 1:22-cr-00456 Document #: 65 Filed: 09/19/23 Page 8 of 11 PagelD #:556

11.

On or about the dates set forth below, in the Northern District of Illinois,

Eastern Division, and elsewhere, the defendants, as set forth below, for the purpose

of executing the above-described scheme, knowingly caused to be transmitted by

means of wire communication in interstate commerce certain writings, signs, and

signals, listed below, each such writing, sign, and signal constituting a separate

count:
COUNT DEFENDANT DATE WRITING, SIGN, AND
SIGNAL
One SHARHABEEL June 24, an internet transmission of a
SHREITEH and 2020 PPP loan application for
TRACY MITCHELL Individual A to Lender A’s
computer servers located outside
of Illinois
Two SHARHABEEL June 24, an internet transmission of a
SHREITEH and 2020 PPP loan application for
TRACY MITCHELL Individual B to Lender A’s
computer servers located outside
of Illinois
Three SHARHABEEL July 15, an internet transmission of a
SHREITEH and 2020 PPP loan application for
TRACY MITCHELL Individual B to Lender A’s
computer servers located outside
of Illinois
Four SHARHABEEL July 16, an internet transmission of a
SHREITEH 2020 PPP loan application for
Individual C to Lender A’s
computer servers located outside
of Illinois
Five SHARHABEEL July 31, an internet transmission of a
SHREITEH 2020 PPP loan application for
Individual D to Lender B’s

computer servers located outside
of Illinois
Case: 1:22-cr-00456 Document #:

65 Filed: 09/19/23 Page 9 of 11 PagelD #:557

COUNT DEFENDANT DATE WRITING, SIGN, AND
SIGNAL
Six SHARHABEEL August 3, an internet transmission of a
SHREITEH and 2020 PPP loan application for
TRACY MITCHELL Individual B to Lender B’s
computer servers located outside
of Illinois
Seven SHARHABEEL February 9, | an internet transmission of a
SHREITEH and 2021 PPP loan application for
TRACY MITCHELL Individual E to Lender F
computer servers located outside
of Illinois
Eight SHARHABEEL March 1, an internet transmission of a
SHREITEH and 2021 PPP loan application for
TRACY MITCHELL Individual B to Lender E’s
computer servers located outside
of Illinois
Nine SHARHABEEL March 14, an internet transmission of a
SHREITEH 2021 PPP loan application for
Individual D to Lender D’s
computer servers located outside
of Illinois
Ten TRACY MITCHELL | March 17, | an internet transmission of a
2021 PPP loan application for
Individual E to Lender F
computer servers located outside
of Illinois
Eleven SHARHABEEL March 20, | an internet transmission of a
SHREITEH 2021 PPP loan application for
Individual F to Lender D’s
computer servers located outside
of Illinois
Twelve SHARHABEEL March 28, an internet transmission of a
SHREITEH and 2021 PPP loan application for House
TRACY MITCHELL of Deals Furniture and
Mattress, Inc. to Lender G’s
computer servers located outside
of Illinois
Thirteen | TRACY MITCHELL | April 14, an internet transmission of a
2021 PPP loan application for
Individual G to Lender I’s

computer servers located outside
of Illinois
Case: 1:22-cr-00456 Document #: 65 Filed: 09/19/23 Page 10 of 11 PagelD #:558

COUNT DEFENDANT DATE WRITING, SIGN, AND
SIGNAL
Fourteen | SHARHABEEL April 7, an internet transmission of a
SHREITEH 2021 PPP loan application for
Individual D to Lender C’s
computer servers located outside
of Illinois
Fifteen SHARHABEEL April 8, an internet transmission of a
SHREITEH 2021 PPP loan application for
Individual F to Lender C’s
computer servers located outside
of Illinois
Sixteen TRACY MITCHELL | March 23, | an internet transmission of a
2021 PPP loan application for
Individual G to Lender H’s

computer servers located outside
of Illinois

In violation of Title 18, United States Code,

10

Section 13438.
Case: 1:22-cr-00456 Document #: 65 Filed: 09/19/23 Page 11 of 11 PagelD #:559

FORFEITURE ALLEGATION

The SPECIAL JANUARY 20283 GRAND JURY further alleges:

1. Upon conviction of an offense in violation of Title 18, United States Code,
Section 1343, as set forth in this Indictment, defendants shall forfeit to the United
States of America any property that constitutes and is derived from proceeds
traceable to the offense, as provided in Title 18, United States Code, Section
981(a)(1)(C) and Title 28, United States Code, Section 2461(c).

2. The property to be forfeited includes, but is not limited to, a personal
money judgment in an amount equal to the proceeds derived from the offenses in
violation of Title 18, United States Code, Section 1343.

3. If any of the property described above, as a result of any act or omission
by a defendant: cannot be located upon the exercise of due diligence, has been
transferred or sold to, or deposited with, a third party, has been placed beyond the
jurisdiction of the Court; has been substantially diminished in value; or has been
commingled with other property which cannot be divided without difficulty, the
United States of America shall be entitled to forfeiture of substitute property, as
provided in Title 21, United States Code, Section 853(p).

A TRUE BILL:

FOREPERSON

ACTING UNITED STATES
ATTORNEY

11


File and source

File

65-indictment.pdf

Size

1,625,479 bytes

SHA-256

05da5357280bcccfd8bf1815fac99740496d6ede2176be15777999a52e945aa7

Our copy

65-indictment.pdf

Original

archive.org