Area business owners face fraud charges in case involving $7.8 million in PPP loans

Two area businesspeople were indicted Tuesday, accused of fraudulently obtaining more than $7.8 million in small business loans under the CARES Act.

Sharhabeel Shreiteh, an accountant in Palos Hills, and Tracy Mitchell, a Joliet business owner, allegedly engaged in fraud related to the federal Paycheck Protection Program, which was created by the CARES Act to cover lost revenue due to economic disruptions from the COVID-19 pandemic, according the a news release from the U.S. Attorney’s Office Northern District of Illinois.

Shreiteh, 43, of Crete, was charged with 13 counts of wire fraud and his arraignment had not yet been scheduled, according to the release. Mitchell, 49, of Plainfield, was charged with 10 counts of wire fraud and he pleaded not guilty during his arraignment hearing Tuesday in federal court, according to the release.

Under a PPP loan, the interest and principal of the loan was forgiven if businesses spent a certain amount of the loan on essential expenses, like payroll and rent, according to the release.

The indictment alleges Shreiteh and Mitchell recruited sole proprietors, self-employed people and businesses to provide personal identifying information, bank statements and other documents and then submitted fraudulent PPP loan applications, according to the release.

Each application contained misrepresentations and false statements to inflate the applicants’ payroll, income and other expenses, according to the release.

In exchange for preparing and submitting the fraudulent applications, Shreiteh and Mitchell received at least $1,000 to $4,000 per successful loan, according to the release.

Michael Ettinger, Mitchell’s attorney, said his client will fight the charges and go to trial.

An attorney for Shreiteh did not immediately respond to requests for comment.