Chicago businessman charged with PPP and EIDL relief fraud

Date: Dec. 11, 2024

Contact: [email protected]

CHICAGO - A suburban Chicago businessman has been indicted on federal charges for allegedly scheming with a California man to fraudulently obtain more than $6.3 million in small business loans and grants under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act").

Francesco Distefano of Addison, Ill., and Sargis Urumieh of Glendale, Calif., allegedly engaged in fraud related to the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL), two sources of relief under the CARES Act. Pursuant to the Act, a PPP loan allowed the interest and principal to be forgiven if businesses spend a certain amount of the proceeds on essential expenses, such as payroll and rent. The EIDL Program provided loan assistance or grants to cover working capital and other operating expenses.

According to a superseding indictment returned in the Northern District of Illinois, Distefano and Urumieh applied for and obtained loans and grants for West Coast POS Inc. and National POS Inc., two companies where Urumieh served as a corporate officer. Distefano also applied for and obtained loans for Distefano Enterprises LLC, an entity that he owned and controlled, the indictment states. The applications contained numerous false statements and misrepresentations regarding the companies' operations, including the number of employees, gross revenues, and payroll expenses, the indictment states.

The indictment alleges that Distefano used the fraud proceeds to purchase, among other things, numerous luxury automobiles, including a Lamborghini Huracan, Maserati Ghibli, and Porsche 911. The indictment also accuses Distefano and Urumieh of using fraud proceeds and a fraudulent mortgage application to purchase a residential property in Glendale, Calif.

The indictment charges Distefano with eleven counts of wire fraud, five counts of money laundering, and one count of knowingly making a false statement to a bank. Urumieh is charged with eight counts of wire fraud. Arraignments in federal court in Chicago have not yet been scheduled.

The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Ramsey E. Covington, Acting Special Agent-in-Charge of IRS Criminal Investigation (IRS-CI) Chicago Field Office, Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI, and Hannibal "Mike" Ware, Inspector General of the U.S. Small Business Administration. The government is represented by Assistant U.S. Attorney Jeffrey S. Snell.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count of wire fraud and money laundering is punishable by up to 20 years in federal prison, while the maximum sentence for the false statement count is 30 years.

IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.