Fraud Friday – Tax Preparer Indicted for Submitting False PPP Applications on Behalf of Clients

“This indictment is an important victory for America’s taxpayers who play by the rules and have no tolerance for those who make up their own,” says IRS Special Agent, Tamera Cantu. “Those that use the CARES Act relief funds as a free money pot steal vital lifelines from those that need it the most during the COVID-19 crisis and could face criminal prosecution and lengthy prison sentences. IRS Criminal Investigation has committed our resources and provides our financial expertise to pursue COVID-19 fraud of all kinds, and those like Mr. Isbaih will be brought to justice.”

 

Hadi Isbaih, the owner and operator of Flash Tax Service Inc., a tax and investment consulting business in Chicago, was indicted earlier this week for allegedly submitting hundreds of false PPP and EIDL applications on behalf of his customers. 

 

According to the indictment, Isbaih advertised online that Flash Tax offered PPP and EIDL application preparation services for a small upfront fee of a few hundred dollars. If the applications were accepted and disbursed, then there would be an additional fee of approximately $1,000.

 

To ensure his customers received the largest loan amount possible, Isbaih allegedly used his tax preparation expertise to create false Schedule Cs and Form 941s, which included inflated payroll expenses. The information from the false tax documents was then used to prepare PPP and EIDL applications, which were submitted by Isbaih on behalf of his clients.

 

As a result of Isbaih’s false statements and misrepresentations, prosecution claims that millions of dollars in fraudulently obtained PPP and EIDL funds were disbursed to Flash Tax customers.

 

Isbaih has been charged with four counts of wire fraud. If convicted, he could face up to 20 years in prison for each count. Investigation into the full extent of the fraud is ongoing.