Chicago Tycoon’s $55M fraud Empire crumbles in Federal Court

In a stunning verdict, a federal jury in Chicago convicted Evanston businessman Rahul Shah, 56, for masterminding a brazen scheme to defraud financial institutions and the U.S. Small Business Administration (SBA) of over $55 million through falsified loan applications and misappropriated COVID-19 relief funds.

The verdict, announced yesterday, marks a significant crackdown on financial misconduct targeting pandemic-era relief programs.

Court documents and trial evidence revealed that Shah, who operated multiple information technology companies in the Chicago area, orchestrated a sophisticated fraud scheme by submitting falsified bank statements, inflated balance sheets, and fabricated audited financial statements with forged signatures to secure loans and lines of credit for which he was ineligible.

Shah later defaulted on at least one loan and one line of credit, leaving federally insured financial institutions reeling from the losses.

Additionally, he engaged in monetary transactions with the illicit proceeds, further deepening his fraudulent activities.

Shah’s deception extended to the Paycheck Protection Program (PPP), a federal initiative designed to support businesses during the COVID-19 pandemic.

He submitted a fraudulent application for a $441,138 SBA-guaranteed loan, grossly overstating his company’s payroll expenses.

To bolster his claims, Shah provided the lender with falsified IRS documents, misrepresenting payments to individuals who never received them.

In a particularly egregious move, he used stolen identities, exploiting the names and taxpayer identification numbers of unsuspecting individuals to support his fraudulent PPP applications.

A stark discrepancy was uncovered when comparing Shah’s submissions to the lender with his company’s actual IRS and state tax filings, which reported significantly lower payroll expenses for 2019.

Shah’s falsified IRS Forms 941, purporting to reflect his company’s quarterly payroll, were central to the prosecution’s case.

The jury found Shah guilty on 16 counts, including seven counts of bank fraud, five counts of making false statements to a financial institution, two counts of money laundering, and two counts of aggravated identity theft.

Shah faces up to 30 years in prison for each count of bank fraud and false statements, 10 years for each money laundering count, and two years for each identity theft count.

His sentencing is scheduled for November 13, 2025, when a federal district court judge will determine his fate based on the U.S. Sentencing Guidelines and other statutory factors.

The case was announced by Matthew R. Galeotti, Head of the Justice Department’s Criminal Division, U.S. Attorney Andrew S. Boutros for the Northern District of Illinois, Special Agent in Charge Douglas S. DePodesta of the FBI Chicago Field Office, and Special Agent in Charge Brady Ipock of the SBA Office of Inspector General (OIG) Chicago Field Office, according to a Justice Department press release.

The FBI Chicago Field Office and SBA OIG Chicago Field Office led the investigation, with Assistant Chief Patrick Mott, Trial Attorney Lindsey Carson of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Jasmina Vajzovic for the Northern District of Illinois prosecuting the case.