Mar 17, 2022 - COVID

La Shish Kabob owner and son found guilty on multiple counts related to PPP fraud

la shish kabob

Axios archives

A federal jury on Thursday convicted La Shish Kabob owner Izzat Freitekh and his son Tarik of fraudulently obtaining $1.7 million in PPP money.

Why it matters: The verdict uses a popular local Middle Eastern restaurant to send a searing message that the feds intend to prosecute people who took advantage of CARES Act funding during the pandemic.

  • “The wicked borrow and do not repay, but in the Freitekhs’ case they also lie to cover up the fraud,” U.S. Attorney Dena J. King said in a statement afterward. “The father and son duo exploited a national emergency for their own benefit, then tried to obstruct justice to avoid punishment. A federal jury saw through their criminal shenanigans.”

Flashback: In December 2020, the U.S. Attorney’s Office charged the Freitekhs with one count of conspiracy to commit wire fraud, one count of bank fraud and one count of false statements.

The intrigue: Izzat and Tarik maintained their innocence throughout: “… the whole world is going to know the truth and justice will prevail,” Tarik told Queen City News as the trial began earlier this month.

Details: The U.S. Attorney’s office said that Izzat Freitekh was convicted of one count of conspiracy to commit money laundering, three counts of money laundering, and a single count of making false statements.

  • He faces up to 10 years in prison for money laundering conspiracy, 10 years for each of the money laundering counts, and five years for the false statements.

Tarik Freitekh was convicted of one count each of conspiracy to commit wire fraud, bank fraud, conspiracy to commit money laundering, money laundering, and falsifying and concealing material facts.

  • He faces up to 30 years in prison for the bank fraud count, 20 years for the wire fraud and money laundering conspiracies, 10 years for the money laundering, and five years for the falsifying material facts.

Zoom out: President Biden made a pointed reference to pandemic relief money fraud in his State of the Union address last week, suggesting there are more cases to come as his Justice Department names a chief prosecutor for pandemic fraud, Axios reports.

  • The Paycheck Protection Program aimed to provide forgivable loans for American businesses hurt financially during the pandemic.
  • The first person charged with COVID relief loan fraud was a restaurant owner in Massachusetts who was sentenced to 56 months in federal prison.

1 big number to go: Since the pandemic, there have been over 676,167 reports amounting to $676 million in coronavirus-related fraud loss in the U.S., according to Federal Trade Commission‘s dashboard.

  • “While businesses were suffering and doing their best to make it through the pandemic, others chose greed,” special agent in charge Donald “Trey” Eakins of IRS Criminal Investigation said in a statement.

[Go deeper: Half of the pandemic’s unemployment money may have been stolen]

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