Chicago — An Indian-origin businessman has been sentenced to six years in federal prison for orchestrating a massive scheme to defraud banks and exploit pandemic relief programs meant to help struggling businesses. Rahul Shah, 56, of Evanston, Illinois, submitted false applications and fabricated financial documents to obtain over $55 million in fraudulent commercial loans and COVID-19 relief funds.
The scheme caused significant harm to the financial system and wasted limited government resources intended for legitimate small business assistance.
Key Facts
• Shah was sentenced to six years in prison and ordered to pay $23,226,005 in restitution to his victims
• He fraudulently obtained over $55 million in commercial loans and falsely applied for Paycheck Protection Program (PPP) funds through forged documents
• 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, and two counts of money laundering
From June 2021 onwards, Shah operated several information-technology companies in the Chicago area while secretly orchestrating an elaborate fraud network. He submitted falsified bank statements that inflated deposits, balance sheets that overstated revenues, and fabricated audited financial statements with forged signatures to federally insured financial institutions.
These deceptive documents were designed to make his companies appear financially healthy and eligible for loans they had no right to receive.
In a separate but coordinated scheme targeting pandemic relief, Shah applied for a $441,138 PPP loan by massively overstating his company's payroll expenses. He supported the fraudulent application with fake IRS documents falsely claiming payments to individuals who never worked for his business.
Court records revealed he used stolen identities by listing names and taxpayer identification numbers of people with no connection to his company.
Shah also forged IRS Forms 941 to reflect quarterly payroll expenses for 2019 that bore no resemblance to the actual filings his business submitted to tax authorities. When investigators compared the false documents to real IRS and state tax filings, the discrepancies were staggering—his fraudulent claims showed far higher payroll than what he had officially reported.
This comparison became crucial evidence proving his deliberate deception.
After obtaining the fraudulently obtained funds, Shah defaulted on at least one loan and one line of credit without remorse. He then carried out monetary transactions using these stolen proceeds, converting the illicit funds into various assets and activities.
The money was moved through multiple accounts and transactions to obscure its origins and avoid detection by law enforcement.
Assistant Attorney General A. Tysen Duva of the Criminal Division stated:
This case underscores the serious consequences awaiting those who exploit emergency relief programs designed for legitimate business needs. Federal authorities from the FBI, Small Business Administration Office of Inspector General, and the Justice Department's Criminal Division worked together to investigate and prosecute Shah's complex fraud scheme.
The conviction sends a clear warning that pandemic relief fraud carries severe criminal penalties including substantial prison time and hefty financial restitution obligations that can burden individuals for decades.
Do You Know?
Since the enactment of the CARES Act establishing the PPP, federal prosecutors have successfully prosecuted over 200 defendants in more than 130 criminal cases related to pandemic relief fraud, seizing over $78 million in fraudulently obtained cash proceeds and numerous properties and luxury items purchased with stolen funds.
Key Terms
• Paycheck Protection Program (PPP): A federal loan program created during the COVID-19 pandemic to help small businesses keep workers employed, with the option to have the loan forgiven if funds were used for payroll
• Wire Fraud: Sending false information or making deceptive statements through electronic communications or financial institutions to obtain money or property unlawfully
• Money Laundering: The process of making illegally obtained money appear legitimate by moving it through various financial transactions and accounts
• Restitution: Court-ordered payment that a convicted person must make to compensate victims for losses caused by their crimes