Suburban Chicago Tax Preparer Convicted of Covid-Relief Fraud

CHICAGO – A suburban Chicago tax preparer has been convicted on federal charges for fraudulently assisting customers in obtaining loans under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.

The jury in U.S. District Court in Chicago on Monday convicted HADI ISBAIH, 42, of Palos Heights, Ill., on all four counts of wire fraud against him.  Each count is punishable by up to 20 years in federal prison.  U.S. District Judge Sharon Johnson Coleman has not yet set a sentencing date.

The conviction was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government is represented by Assistant U.S. Attorneys Kartik K. Raman and Rick D. Young.

The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan program (EIDL) were sources of relief established by the CARES Act in 2020.  The programs allowed qualifying small businesses to receive low-interest, government-backed loans to cover a temporary loss of revenue during the Covid pandemic.

According to evidence presented at trial, Isbaih owned and operated Flash Tax Service Inc., a tax preparation business in Bridgeview, Ill.  From May to August 2020, Isbaih submitted on behalf of several Flash Tax customers PPP and EIDL applications that contained materially false statements and misrepresentations about the customers’ businesses, such as gross revenues and number of employees.  Isbaih also prepared and submitted tax returns with the loan applications that falsely represented the number of employees, monthly payroll, gross revenues, and annual income.

Isbaih charged Flash Tax customers an upfront fee of several hundred dollars before he submitted the fraudulent applications.  If the customers received the PPP or EIDL funds based on those applications, Isbaih would then charge the customers additional fees.

Anyone with information about attempted Covid-relief fraud can report it to the Department of Justice by calling the National Center for Disaster Fraud Hotline at 866-720-5721, or by completing a NCDF online complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.