A Marina del Rey man is expected to be sentenced on Thursday for submitting fraudulent loan applications to obtain roughly $3.2 million in COVID-19 loans for enterprises that prosecutors claim were shell corporations.
Mark Shehata, 73, pled guilty last year in downtown Los Angeles to single federal counts of wire fraud, transactional money laundering, and making false statements to federal authorities, according to the US Department of Justice.
According to court documents, Shehata formed and registered four limited liability companies that allegedly operated in Marina del Rey: Shirmak Group, Cynergy Group, Global Network Investments, and Alpha and Omega Group.
From May 2020 to May 2021, he submitted at least seven fraudulent loan applications through the Paycheck Protection Program, a financial aid program established by Congress to assist businesses impacted by the pandemic’s economic impact. The PPP loans were to be used by recipients to cover only allowed company expenses such as wages, mortgage interest, lease, and utilities.
Federal authorities claim Shehata’s firms were nothing more than shell companies. None of the loan proceeds. According to the DOJ, Shehata’s fraudulently obtained funds were utilized to pay employees for payroll and other company expenditures.
According to the indictment, Shehata submitted fake applications to the Small Business Administration and multiple lenders, demanding a total of $5.42 million in PPP loans and fraudulently obtaining approximately $3.15 million.
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