Joliet Business Owner Indicted In $7.8M PPP Loan Fraud: Feds

CHICAGO — Two local businessmen, including a business owner in Joliet, have been indicted on federal charges after prosecutors said they fraudulently obtained nearly $7.8 million in small business loans under the CARES Act, the U.S. Attorney General’s Office for Northern Illinois announced on Wednesday.

Tracy Mitchell, the owner of House of Deals, Inc., and House of Furniture and Mattress, Inc., along with Palos Hills accountant Sharhabeel Shreiteh, were indicted on charges on Tuesday, claiming that they reportedly engaged in fraud in connection with the Payroll Protection Program that was created to help small businesses during the COVID-19 pandemic, federal prosecutors said.

In the indictment that was unsealed on Tuesday, prosecutors allege that Mitchell and Shreiteh allegedly recruited independent business owners, self-employed workers, and other businesses to provide them with personal information, bank statements, and other documents which they then submitted for PPP loans, prosecutors said.

The indictment states that the loan applications contained numerous misrepresentations and false statements that inflated the applicants’ payroll, income, and other expenses. In exchange for preparing and submitting the fraudulent applications, Shreiteh and Mitchell received at least $1,000 to $4,000 per successful loan, the indictment states, prosecutors allege.

The activity began in June of 2020 and continued into 2021, according to the indictment. As part of the applications, Shreiteh and Mitchell used fraudulent information on the applications and misrepresented their client’s occupations, income, and incurred business expenses, knowing that they had not asked clients for this information.

On the loan applications, the two men claimed that each loan applicant had payrolls of at least $90,000 each year, prosecutors said. The men knew at the time that the information was not true, prosecutors said, because they had never obtained the information.

Shreiteh, 43, Crete, was charged with 13 counts of wire fraud while Mitchell, 49, Plainfield, was charged with 10 counts, according to the indictment. Mitchell pleaded not guilty during his arraignment Tuesday in federal court in Chicago. Shreiteh’s arraignment has not yet been scheduled, officials said.