Chicago PPP Loan Fraud Lawyers

Chicago PPP Loan Fraud Lawyers

Federal agents contacted you about your Paycheck Protection Program loan application. You’re in Chicago, Illinois. Rahul Shah, 56, of Evanston, was convicted by a federal jury in July 2025 for his role in schemes to fraudulently obtain over $55 million in commercial loans and for submitting fraudulent applications to obtain COVID-19 relief money through the Paycheck Protection Program. Shah was the owner and operator of several information technology companies in the Chicago area. Jalal, 51, of Niles, was sentenced on February 11, 2025, to five years and two months in federal prison (62 months) and ordered to pay more than $1.5 million in restitution to the SBA after pleading guilty to bank fraud and money laundering charges related to COVID-relief fraud. William Frederick Reed, a police officer in Dolton and Robbins, Illinois, was charged in April 2025 with allegedly fraudulently obtaining COVID-relief loans and then concealing the proceeds in his bankruptcy case. The Northern District of Illinois has multiple ongoing prosecutions in 2025.

Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek. We’ve defended federal PPP fraud cases in Illinois for many, many, years. We know how Northern District prosecutors charge Paycheck Protection Program fraud and what sentences you’re facing.

The federal government approved PPP loans in 2020 with minimal verification. Now in 2025, they’re prosecuting Chicago-area business owners, police officers, and accountants. Here’s what happens in YOUR situation.

Rahul Shah – $55 Million PPP Fraud Trial Conviction

Rahul Shah, 56, of Evanston, Illinois, was convicted by a federal jury in July 2025 for his role in schemes to fraudulently obtain over $55 million in commercial loans and lines of credit and for submitting fraudulent applications to obtain COVID-19 relief money through the Paycheck Protection Program. Shah was the owner and operator of several information technology companies in the Chicago area. He went to trial and was convicted – he is now awaiting sentencing. Wire fraud under 18 U.S.C. § 1343 carries a statutory maximum of 20 years in federal prison per count, Shah was convicted by a federal jury which means he exercised his constitutional right to trial instead of pleading guilty, the trial penalty in federal PPP fraud cases is substantial because defendants who plead guilty receive dramatically reduced sentences while defendants convicted at trial face sentences at the high end of federal guidelines or statutory maximums, Jalal of Niles was sentenced in February 2025 to 62 months in prison for $1.5 million in fraud because he pled guilty to bank fraud and money laundering charges, Shah’s $55 million fraud amount is over 35 times larger than Jalal’s fraud amount, if Jalal received 62 months for $1.5 million with a guilty plea then Shah who was convicted at trial for $55 million faces 10-20 years in federal prison when sentenced, the difference between 62 months and 10-20 years demonstrates the trial penalty that shapes 97% of federal defendants into pleading guilty rather than exercising their constitutional right to trial.

Shah owned information technology companies in the Chicago area. Business owners who use their legitimate companies to submit fraudulent PPP applications face federal charges. The PPP program required business owners to certify that the information in their applications was true and correct. Shah submitted fraudulent applications to obtain COVID-19 relief money. Federal prosecutors in the Northern District of Illinois charged him with bank fraud related to the commercial loans and wire fraud related to the PPP applications. A federal jury convicted him in July 2025. He is awaiting sentencing.

Law Enforcement and Professional Enablers Face Charges

William Frederick Reed was a police officer in Dolton and Robbins, Illinois. He was charged in April 2025 with allegedly fraudulently obtaining COVID-relief loans and then concealing the proceeds in his bankruptcy case. When defendants try to hide PPP fraud proceeds by filing bankruptcy without disclosing the fraudulent loans, federal prosecutors add bankruptcy fraud charges under 18 U.S.C. § 152. Reed allegedly fraudulently obtained the loans AND concealed the proceeds in bankruptcy – two separate federal crimes. The bankruptcy concealment demonstrates how attempting to hide fraud creates additional federal charges.

Sharhabeel Shreiteh, an accountant from Palos Hills, Illinois, and Tracy Mitchell, a business owner from Joliet, Illinois, were indicted for allegedly fraudulently obtaining more than $7.8 million in PPP loans. Shreiteh is an accountant – accountants who prepare fraudulent PPP applications for clients face the same federal charges as the business owners who submit the applications. Mitchell is a business owner. The $7.8 million scheme involved an accountant-business owner partnership. When professional enablers like accountants facilitate PPP fraud, they face wire fraud charges carrying 20-year statutory maximums. Shreiteh’s accounting license is at risk. Conviction for federal fraud results in professional license revocation in Illinois.

Federal Prison Sentences in Chicago PPP Cases

February 11, 2025: Jalal, 51, of Niles, was sentenced to 62 months in federal prison and ordered to pay more than $1.5 million in restitution to the SBA. He pled guilty to bank fraud and money laundering charges related to COVID-relief fraud. The 62-month sentence reflects his guilty plea and cooperation. July 2025: Rahul Shah was convicted by federal jury for $55 million in commercial loan fraud and PPP fraud. Shah went to trial instead of pleading guilty. He is awaiting sentencing. For $55 million in fraud with a trial conviction, expect 10-20 years in federal prison.

The sentencing disparity demonstrates the trial penalty. Jalal: $1.5 million fraud, guilty plea, 62 months. Shah: $55 million fraud, trial conviction, awaiting sentencing but expect 10-20 years. The difference between 62 months and 10-20 years is the trial penalty. Federal sentencing guidelines incentivize guilty pleas through sentence reductions for acceptance of responsibility and cooperation. Defendants who go to trial and are convicted face sentences at the statutory maximum or high end of guidelines.

Federal sentencing guidelines for PPP fraud are based on loss amount. Under $1 million with guilty plea: 18-36 months. $1 million to $5 million: 3-6 years. Over $5 million with guilty plea: 5-10 years. Over $5 million with trial conviction: 10-20 years. Jalal’s $1.5 million fraud with guilty plea resulted in 62 months. Shah’s $55 million fraud with trial conviction will result in 10-20 years. Restitution is mandatory in every PPP fraud case. You must repay the full PPP loan amount plus interest and penalties. This is federal debt that survives bankruptcy. Jalal owes more than $1.5 million. You cannot discharge this debt. Supervised release follows prison: 2-3 years of federal probation. You cannot start or manage a business without permission from your probation officer during supervised release.

How Northern District Prosecutes PPP Fraud

The Northern District of Illinois has multiple 2025 indictments ongoing. Four defendants were indicted in August 2025 for allegedly fraudulently obtaining millions of dollars in PPP and EIDL loans. Five defendants were indicted in July 2025 for fraud related to PPP, EIDL, and Pandemic Unemployment Assistance programs – charges ranging from four to nine counts of wire fraud, each count carrying up to 20 years in federal prison. Three defendants were indicted in July 2025 for allegedly fraudulently obtaining more than $2 million in PPP and EIDL loans. Active ongoing enforcement demonstrates Northern District prosecutors are still investigating and prosecuting PPP fraud cases in 2025 – five years after the loans were approved.

Documentary evidence makes conviction nearly certain. Your PPP application with your signature. Your IRS Form 941 quarterly payroll tax returns showing actual payroll expenses. Your bank statements showing how you spent the PPP funds. Reed’s bankruptcy case shows how attempting to conceal fraud creates additional charges. When defendants file bankruptcy without disclosing PPP loans or fraud proceeds, prosecutors add bankruptcy fraud charges. The concealment attempt results in two prosecutions: PPP fraud AND bankruptcy fraud.

The mistake Chicago business owners make: responding to initial SBA Office of Inspector General audit letters without legal counsel. They think explaining the discrepancy will resolve the issue. Instead, statements like “I may have inflated my payroll numbers slightly on the PPP application” become admissions of wire fraud. By the time they hire a federal criminal defense attorney, they’ve already confessed to federal agents or provided written statements that prosecutors use at trial.

Plea versus trial decision determines your sentence. Documentary evidence – PPP application, Form 941 filings, bank statements – makes conviction nearly certain if you go to trial. Jalal pled guilty to bank fraud and money laundering, received 62 months. Shah went to trial, convicted, awaiting sentencing – expect 10-20 years. The trial penalty is real. Federal PPP fraud cases have a 97%+ conviction rate at trial. If you plead guilty and cooperate, expect 18-60 months depending on fraud amount. If you go to trial and are convicted, expect sentences at statutory maximums – up to 20 years per count of wire fraud.

At Spodek Law Group – Todd Spodek has defended federal PPP fraud cases in Illinois for many, many, years. If federal agents contacted you about your PPP loan – if the SBA Office of Inspector General sent you an audit letter – time matters. Northern District of Illinois has multiple 2025 indictments ongoing. Shah convicted at trial faces 10-20 years. Jalal pled guilty, received 62 months. Call 212-300-5196.