Chicago, Illinois — An Indian-origin businessman has been sentenced to six years in federal prison for orchestrating a massive scheme that defrauded banks of over $55 million in commercial loans and pandemic relief funds.
Rahul Shah, 56, from Evanston submitted falsified financial documents, forged signatures, and used stolen identities to trick federally insured banks into lending him money he was never eligible to receive.
The case marks a significant prosecution in the ongoing fight against pandemic-era financial fraud that harmed the nation's financial system.
Key Facts
• Rahul Shah was convicted in July 2025 on 16 federal counts including seven counts of bank fraud, five counts of making false statements to financial institutions, two counts of money laundering, and two counts of aggravated identity theft
• He fraudulently obtained $55 million in commercial loans and lines of credit by submitting falsified bank statements that inflated deposits, balance sheets that overstated revenues, and fabricated audited financial statements bearing forged signatures
• Shah was ordered to pay $23,226,005 in restitution and will serve two additional years under supervised release after completing his prison sentence
Rahul Shah operated several information technology companies across the Chicago area when he launched his elaborate fraud scheme targeting federally insured financial institutions. He submitted falsified bank statements that inflated his company deposits and created fraudulent balance sheets that dramatically overstated his business revenues.
Court records revealed he even fabricated audited financial statements complete with forged signatures to gain credibility with lenders.
In a separate scheme tied directly to pandemic relief programs, Shah applied for a $441,138 loan guaranteed by the U.S. Small Business Administration through the Paycheck Protection Program.
The application significantly overstated payroll expenses for a company he controlled and included fraudulent IRS documents falsely claiming payments to individuals who never received them.
Federal prosecutors discovered he used stolen identities by listing names and taxpayer identification numbers belonging to people with no connection whatsoever to his business.
When Shah submitted his quarterly IRS Forms 941 to document the company's payroll expenses for 2019, the numbers told a completely different story compared to his actual tax filings. The business had reported far lower payroll expenses to both federal and state tax authorities, exposing the magnitude of his deception.
Additionally, prosecutors found that Shah defaulted on at least one loan and one line of credit while using the fraudulent proceeds for personal financial transactions.
The fraud scheme represents a deliberate and sustained effort to deceive multiple banks and exploit government programs designed to protect American businesses during the pandemic crisis. Federal investigators and prosecutors from the FBI, Small Business Administration Office of Inspector General, Justice Department's Criminal Division Fraud Section, and the U.S. Attorney's Office for the Northern District of Illinois worked together to build this case.
The coordinated effort demonstrates how serious federal authorities view pandemic fraud and financial crimes against the banking system.
Assistant Attorney General A. Tysen Duva of the Criminal Division stated in court documents:
This powerful statement underscores the broader impact of such fraud beyond just the immediate financial losses. The resources that could have helped struggling small businesses during the pandemic were instead diverted to Shah's fraudulent schemes.
U.S. Attorney Andrew S. Boutros for the Northern District of Illinois characterized the case as reflecting Shah's
emphasizing how the length and scope of the fraud demonstrated his calculated approach to criminal activity. The six-year prison sentence sends a clear message that federal prosecutors will aggressively pursue pandemic fraud cases with appropriate severity. Shah's conviction serves as a warning to other potential fraudsters that such schemes will be discovered, prosecuted, and punished.
This case highlights the vulnerabilities that existed in pandemic relief programs and the ongoing challenges federal authorities face in preventing financial fraud. While programs like the Paycheck Protection Program saved countless legitimate businesses during COVID-19, they also attracted criminals willing to exploit national crisis for personal gain.
Going forward, financial institutions and government agencies continue tightening oversight and implementing stronger verification procedures to prevent similar fraud.
Do You Know?
Shah's case is one of numerous pandemic relief fraud prosecutions that have recovered billions of dollars for taxpayers, with the SBA Office of Inspector General investigating thousands of suspected fraud cases since 2020 across the country.
Key Terms
• Paycheck Protection Program (PPP): A federal loan program created under the CARES Act to help small businesses keep employees on payroll during the COVID-19 pandemic
• Bank Fraud: A federal crime involving deception to illegally obtain money or property from a financial institution
• Money Laundering: The process of concealing the origins of illegally obtained money by moving it through complex transactions to make it appear legitimate
• Restitution: Court-ordered payment by a convicted person to compensate victims for losses caused by the crime
• Aggravated Identity Theft: Using someone else's personal identifying information to commit additional crimes, resulting in enhanced federal charges