The Suspect Could Face 20 Years in Federal Prison
A Marina del Rey man has been apprehended on federal charges after allegedly obtaining nearly $3.2 million in fraudulent COVID-19 loans for his businesses, which were determined to be shell companies.
Mark Farag Shehata, 70, also known as “Samy Farag,” “Mark Farag,” and “Mark Fshehata,” was arrested on Monday by federal agents. He was subsequently arraigned in United States District Court in downtown Los Angeles.
Shehata pleaded not guilty to seven counts of wire fraud. A trial date has been set for July 24, and a bond of $500,000 was established in this case.
Shehata allegedly organized and registered four limited liability companies that purportedly operated in Marina del Rey: Shirmak Group LLC, Cynergy Group Internatioal (sic) LLC, Global Network Investments LLC, and Alpha and Omega Group LLC.
Between May 2020 and May 2021, Shehata is accused of submitting at least seven false and fraudulent loan applications under the Paycheck Protection Program (PPP), a government initiative designed to provide financial assistance to businesses impacted by the economic consequences of the COVID-19 pandemic. PPP loans are intended for authorized business expenses such as payroll, mortgage interest, lease, and utilities.
According to the indictment, Shehata’s four businesses were merely shell companies, and none of the fraudulently obtained PPP loan funds were used to meet payroll obligations or cover legitimate business expenses.
To carry out the scheme, Shehata allegedly submitted false applications to the Small Business Administration and multiple lenders, seeking a total of $5,423,989 in PPP loans. It is alleged that he fraudulently obtained approximately $3,154,265 in PPP proceeds.
If convicted, Shehata could face a maximum sentence of 20 years in federal prison for each count.
The United States Department of Justice Office of Inspector General conducted the investigation in this matter.
