Palos Heights Tax Preparer Convicted Of COVID-19 Relief Fraud

CHICAGO — A Palos Heights tax preparer was found guilty of providing fraudulent information to help customers obtain loans under the CARES Act. Hadi Isbaih, 42, was convicted by a jury on four counts of wire fraud.

Federal prosecutors said Isbaih operated a business out of Bridgeview called Flash Tax Service, which advertised on Facebook, billboards and its own website. Services included tax and investment consulting, and immigration and administration. Flash also advertised its services related to COVID-19 government relief programs.

From May to August 2020, prosecutors said Isbiah concocted a scheme where he would file false and fraudulent information in order for his customers to receive Paycheck Protection Program and Economic Injury Disaster Loan payouts. Both federal programs were created to provide COVID-19 relief for the self-employed, employee payroll expenses and independent contractors during the pandemic.

Prosecutors alleged that Ibiah served hundreds of clients for assistance in applying for COVID-19 relief, requiring several hundreds dollars up front. In exchange, Ibiah knowingly submitted false statements about the nature of customers’ businesses, income, gross revenue and expenses, obtaining millions of dollars in PPP and EIDL relief for those customers, the complaint maintained.

Before Ibiah turned over the fraudulently obtained funds, prosecutors said Ibiah would require an additional $1,000 from each customer. Prosecutors also claimed that Ibiah enlisted a Flash employee in preparing false Schedule C tax documents so customers could qualify for even bigger PPP and EIDL payouts.

Each count is punishable by up to 20 years in federal prison. U.S. District Judge Sharon Johnson Coleman has not yet set a sentencing date.