Two men were sentenced yesterday for their roles in the submission of fraudulent loan applications seeking more than $1.7 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Izzat Freitekh, 57, of Waxhaw, North Carolina, was sentenced to four years in prison and his son Tarik Freitekh, aka Tareq Freitekh, 35, whose last known residence was in Glendale, California, was sentenced to 87 months in prison. The government previously seized and secured the forfeiture of approximately $1.3 million in PPP funds illegally obtained by the Freitekhs, which has been returned to a victim lender.
According to court documents and evidence presented at trial, Izzat and Tarik Freitekh obtained approximately $1.7 million by submitting multiple fraudulent PPP loan applications for companies owned by Izzat Freitekh: La Shish Kabob, La Shish Kabob Catering, Green Apple Catering, and Aroma Packaging. The loan applications misrepresented the number of employees and payroll expenses. After obtaining the fraudulent loan proceeds, the Freitekhs engaged in unlawful monetary transactions with the proceeds of the scheme, including making $30,000 in payments to family members. In March 2022, a federal jury in the Western District of North Carolina convicted the Freitekhs of money laundering and other offenses.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Dena J. King for the Western District of North Carolina; Inspector in Charge Tommy Coke of the U.S. Postal Inspection Service (USPIS) Atlanta Division; Special Agent in Charge Donald E. Eakins of the IRS Criminal Investigation (IRS-CI) Charlotte Field Office; and Special Agent in Charge Mark Morini of the U.S. Treasury Inspector General for Tax Administration (TIGTA) Southeast Field Division made the announcement.
The USPIS, IRS-CI, and TIGTA investigated the case.
Trial Attorneys Joshua DeBold and Matt Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark Odulio for the Western District of North Carolina prosecuted the case.
The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP. Since the inception of the CARES Act, the Fraud Section has prosecuted over 192 defendants in more than 121 criminal cases and has seized over $78 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at https://www.justice.gov/criminal-fraud/ppp-fraud.
In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Official news published at https://www.justice.gov/opa/pr/father-and-son-sentenced-17-million-covid-19-relief-fraud