Parker man accused of defrauding nearly $2M

A federal grand jury indicted a Parker man this week on suspicion of fraudulently applying for and receiving nearly $2 million from COVID-19 relief programs over a three-year period and using the money for his personal benefit.

Tarek Kassem, 63, is alleged to have received more than $1.4 million in Economic Injury Disaster Loans from the Small Business Administration and more than $300,000 in Payroll Protection Program monies using three business names, the U.S. attorney’s office in Colorado announced Wednesday.

The grand jury indicted Kassem for wire fraud and money laundering Tuesday. It determined the ill-gotten benefits were obtained between March 2020, when the pandemic struck, through at least March of last year.

The grand jury also determined that Kassem applied for and obtained Colorado unemployment benefits.

“These applications contained a number of false and fraudulent certifications and representations, including representations that funds would be used to pay eligible business expenses, when, in fact, the bulk of the proceeds were used for the defendant’s personal benefit,” the U.S. attorney’s statement said Wednesday.

The Coronavirus Aid, Relief and Economic Security Act, known as CARES, was put into place at the start of the pandemic to provide emergency financial assistance to Americans dealing with the economic impact of the pandemic, which quickly jettisoned more than 20 million jobs nationwide as government shutdown orders darkened restaurants, gyms and ski resorts.

In Colorado, about 380,000 jobs were lost during the first two months of the pandemic.

The CARES Act created the Paycheck Protection Program to provide loans to small businesses to retain workers and maintain payroll.

The Small Business Administration also provided Economic Injury Disaster Loans to eligible small businesses hit with major financial disruptions because of the pandemic.

Kassem joins a growing list of Coloradans who have been charged with improper use of COVID-19 relief benefits.

Pandemic relief programs have been struck by massive fraud as they were cobbled together early on with few guardrails to deter fraudsters, as political leaders focused on getting money out to people in need quickly.

A state audit report found that from March 2020 to April 2021, the Colorado Department of Labor and Employment paid out more than $73 million in unemployment claims that were likely fraudulent.

PPP brought more than $15 billion in federal money into the state, and based on an estimate that roughly 10% of all PPP money distributed across the country was snatched up by fraudsters, it could mean as much as $1.5 billion was stolen from the program in Colorado.

The case involving Kassem was investigated by the Internal Revenue Service, the FBI and the U.S. Department of Labor. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud line at 866-720-5721 or online.