A businessman from suburban Chicago has been indicted on federal charges for allegedly conspiring with a man from California to fraudulently secure over $6.3 million in loans and grants intended for small businesses under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Francesco Distefano, 28, of Addison, Illinois, and Sargis Urumieh, 57, of Glendale, California, are accused of committing fraud involving the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL), both components of the CARES Act. These programs were designed to support businesses by offering forgivable loans for essential expenses like payroll and rent and providing financial assistance for operating costs.
The indictment returned in the Northern District of Illinois alleges that Distefano and Urumieh applied for loans and grants on behalf of West Coast POS Inc. and National POS Inc., where Urumieh was a corporate officer. Additionally, Distefano reportedly sought loans for Distefano Enterprises LLC, which he owned. The applications are said to have included false information about the companies' operations such as employee numbers, revenue figures, and payroll costs.
It is alleged that Distefano used the funds obtained through fraud to purchase luxury cars including a Lamborghini Huracan, Maserati Ghibli, and Porsche 911. The indictment also claims that both men used fraudulent means to buy residential property in Glendale, California.
Distefano faces charges including eleven counts of wire fraud, five counts of money laundering, and one count of making a false statement to a bank. Urumieh is charged with eight counts of wire fraud. Their arraignments in federal court in Chicago have not yet been scheduled.
The announcement was made by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois; Douglas S. DePodesta, Special Agent-in-Charge of the FBI's Chicago Field Office; Ramsey E. Covington, Acting Special Agent-in-Charge at IRS Criminal Investigation Chicago Field Office; and Hannibal “Mike” Ware, Inspector General of the U.S. Small Business Administration. Assistant U.S. Attorney Jeffrey S. Snell is representing the government.
It is important to note that an indictment only contains charges and does not serve as evidence of guilt. Defendants are presumed innocent until proven guilty beyond a reasonable doubt at trial. Each charge carries potential penalties including up to 20 years in prison for wire fraud or money laundering counts and up to 30 years for making a false statement.
Individuals with information regarding Covid-19 related fraud can report it to the Department of Justice via phone at (866) 720-5721 or online at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.