Published On: Mon, Mar 1st, 2021

Did Trump’s DOJ falsely charge an innocent, Charlotte, NC family with PPP COVID-Relief Fraud

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On December 17th, 2020, an innocent Charlotte, NC business owner and his son were falsely charged by Trump’s DOJ for obtaining a Covid PPP loan.

After reviewing the discovery available to the public by the courts, and visiting the SBA official website where it is clearly stated that if you are a sole proprietor, independent contractor, or self-employed individual, you may apply for a PPP loan equivalent to the figure listed on line 7 of Schedule C tax form- that is, the gross income.

Looking at the father, Mr. Izzat Freitekh’s tax returns for his 3 active NC popular businesses, he is qualified to get over $1 Million USD through the new Biden PPP Loan program for small businesses or SBA (Economic Injury Disaster Loans) EIDL’s previous and current program as well, combined by a few different NC and Mecklenburg county programs that help small businesses. You can also add another $800,000 to this figure.

I began asking myself questions regarding whether if Mr. Freitekh is qualified for the same loan amount that Trump’s DOJ claims he obtained “fraudulently”.

Mr. Izzat Freitekh is an abiding citizen who has been working hard his entire life without any incidents with the law. Also, he is a very successful businessman, father, and husband there is no motive for him and his son to commit fraud.

I started looking at Mr. Freitekh’s statement he made in a meeting with the prosecutor 6 months before they decided to file the charges against him and his son; Mr. Freitekh stated that a company approached him that offers a service to apply for SBA loans for his 3 active businesses. The company filed the loan applications for him.

This company offers many different services for a fee. It is worth noting that I visited the website associated with the mentioned company, and I found that this company offers all types of business services starting from Marketing, PR, SBA loans, and many other services.

Mr. Freitekh’s son used this companies services back in 2018 and had a pleasant experience.

After carefully reviewing the discovery, the evidence indeed shows that Mr. Freitekh did not submit any of the loans, nor signed any of the loans according to the IP address. There is mail evidence, as well as electronic communication between the Freitekh’s and the company. The company got paid through their Bank of America business account.

A fee for applying for the loan, as well as a percentage for each loan was requested to wired to their BOA business accounts. Trump’s DOJ investigated the matter for a few months, then decided to press charges against Izzat and his son Tarik Freitekh.

My second question is why the head of Trump’s DOJ, Mr. Andrew R Murray (district attorney), who recently also resigned, charged Izzat and his son if a company clearly applied for them and got paid. There is no reason for them to commit fraud because they are qualified for similar amounts. Mr. Freitekh is the one who contacted Bank of America and brought light upon the situation. The SBA then began asking how the loan was approved, what documents were used, etc. The bank, neither the SBA, ever called Mr. Freitekh to confirm the application/ documents provided before and after the loan was approved.

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After Mr. Freitekh called, visited, and notified the bank, the SBA started investigating the matter. Mr. Freitekh offered to pay back the $300,000 used for his businesses from the $1.7 Million approved. The $1.4M was held by the bank/ SBA after Mr. Freitekh notified them. It also came to my attention that the company which applied for the loan wrote in the bank/ SBA application that the purpose of the loan was for equipment, not paychecks or anything related to that.

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Trump’s DOJ says that Mr. Izzat Freitekh’s son is involved because he emailed his father’s accountant months after the loans were applied for. He was informing the accountant that a company applied for the loans on his father’s behalf and he was inquiring on

what type of SBA loans the company had applied for. What really threw me off is that Mr. Freitekh’s 33-year-old son, Tarik, does not own any of the bank accounts where the loans were deposited neither did he receive any of the funds, nor benefit financially from any of these loans.

Was Trump’s DOJ trying to get extra publicity by involving Mr. Izzat Freitekh and his son so they can publish multiple press releases to make them an example in North Carolina, or is Trumps DOJ trying to cover up the huge mistake they have made and what damages have unfolded due to their negligent actions?

The good news is that Mr. President Joe Biden has acknowledged that Small businesses are the heart of our nation and acted on it, unlike the previous administration. President Joe Biden and his new SBA administration, lead by Isabel Casillas Guzman, made the proper changes to help improve the PPP program. Small businesses with 20 employees or less are qualified.

Trump’s program has damaged many families, businesses, and it will take some time to repair. Kyle Herrig, president of Accountable.US said “After Trump’s poorly designed and poorly implemented Paycheck Protection Program failed to keep thousands of small businesses afloat and employees on payrolls,”

Below are some issues Trump’s program had:

UNEQUAL DISTRIBUTION OF FUNDS: Up to 90-percent of businesses owned by people of color or women estimated to have been shut out of receiving aid due to the program’s poor structure. The nation’s least affluent congressional districts received $13 billion less in PPP funds than the nation’s wealthiest districts. The ten congressional districts with the highest percentage of Black residents got nearly $13 billion less in PPP funding than the ten districts with the fewest Black residents — a difference of over 64,000 fewer loans.

RAMPANT FRAUD: The U.S. Department of Justice has already

charged 60 companies with fraud — and with the agency reportedly investigating “several hundred” cases of PPP fraud, that appears to be just the tip of the iceberg.

Over $1 billion in taxpayer-funded relief money was awarded to companies that “double-dipped” in multiple programs, violating the PPP’s rules. With only loans of more than $2 million facing automatic audits through the historically non-transparent program, it’s possible that billions of dollars in relief money may not be investigated for fraud at all.

SMALL BUSINESSES STILL STRUGGLING: A new report in Fortune shows that a devastating 100,000 businesses that temporarily closed up shop amid the COVID-19 crisis are now out of business.

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An estimated 40% of Black-owned businesses are expected not to survive the pandemic.

A Yelp report found that a whopping 60% of the 160,000 businesses listed in its directory will remain closed after the crisis. The Select Subcommittee on the Coronavirus Crisis released a staff report on the Paycheck Protection Program (PPP) following a months-long investigation. The report shows that Treasury and SBA encouraged big banks to provide loans to their wealthy existing clients at the expense of truly struggling small businesses in underserved communities.

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Since the program’s rollout, SBA failed to issue clear guidance to lenders, or conduct adequate oversight. As a result, banks prioritized larger, better-connected businesses. Plus, simply by the nature of the program’s first-come-first-served design, those bigger and better-connected businesses swallowed up most of PPP’s initial funds, leaving many minority-owned businesses to wait until the second round of funding was approved. By then, many businesses had already closed their doors for good.

Unfortunately, the SBA’s inaction in this crisis follows a decades-long tradition of failing to support its mandate to help business owners of color. The agency has not adequately provided small business owners of color with the support the Small Business Act calls for in nearly 70 years since the legislation’s passing. The SBA’s

consistent failure to adequately fulfill its congressional mandate, especially in the age of Covid-19, requires that we reimagine what the agency could look like. If future administrations provided the SBA with adequate funding and appointed a Small Business Administrator willing to invest in these defunct programs, the SBA might be able to help build a more inclusive, stronger economy.

The Biden changes are part of a spate of revisions requested by the Biden administration aimed at making the $284.5 billion forgivable loan program more equitable and accessible to the smallest businesses. Because the U.S. Department of Treasury and the Small Business Administration rushed the massive loan program out in a matter of weeks to help cash-starved businesses, there were not a lot of specifics provided on the front end about how PPP would work. The SBA is making up for that now, adding items to its online FAQ sheet for the program on a daily basis. That means if you thought you understood the rules one day, they could change the next. The piecemeal distribution of guidance has led to some confusion and often resulted in changes that could impact whether a business receives loan forgiveness.

“I do think forgiveness is going to be a much more complex process than many originally thought,” said Thomas Nicolosi, a Deloitte principal who heads the firm’s banking compliance risk management industry group. “Everything you do has to be backed by documentation. And you have to be agile because they are still adding requirements as they go along.”