A Marina Del Rey man who admitted gaming pandemic relief rules for millions is headed to federal prison for a year.
On Thursday, 73-year-old Mark Shehata of Marina Del Rey was sentenced to one year in federal prison after admitting to a Paycheck Protection Program fraud scheme that prosecutors say brought in roughly $3.15 million. A federal judge also ordered him to forfeit about $3.4 million recovered in the case, closing out a multi-year investigation into pandemic-era relief fraud tied to several limited liability companies registered on the Westside. Prosecutors have pointed to the case as an example of how some applicants twisted emergency loans that were supposed to keep workers on payroll.
According to MyNewsLA, Shehata pleaded guilty in 2025 to wire fraud, transactional money laundering and making false statements to federal agents. At sentencing, prosecutors told the court he submitted at least seven fraudulent PPP applications between May 2020 and May 2021. The prison term and forfeiture order are part of ongoing federal efforts to claw back relief money that was not used for payroll or other authorized business expenses.
As detailed by the U.S. Attorney’s Office for the Central District of California, Shehata organized and registered four limited liability companies, Shirmak Group, Cynergy Group, Global Network Investments and Alpha and Omega Group, which prosecutors describe as sham operations. Court documents state he sought roughly $5.42 million in PPP loans and ultimately obtained about $3.15 million in proceeds. The indictment alleges he relied on bogus payroll numbers and fabricated documents when applying to the Small Business Administration and to private lenders.
How investigators say the scheme worked
Federal oversight records from the U.S. Department of Justice’s Office of the Inspector General state that Shehata submitted seven false PPP applications and then moved the loan proceeds through transactions that obscured where the money came from. The OIG reported that the companies had no real employees and that loan funds were not used to pay wages or legitimate business costs. The indictment was unsealed in June 2023, and the OIG and the Pandemic Response Accountability Committee assisted the Central District investigation.
Penalties and wider enforcement
The statutes Shehata pleaded guilty to carry steep maximum penalties, and each wire fraud count can carry up to 20 years in prison, although judges weigh multiple factors when deciding on a sentence, according to the U.S. Attorney’s Office. The Central District has kept up a steady drumbeat of pandemic-era fraud prosecutions; earlier this spring, a Culver City restaurateur received a longer sentence after pleading guilty in a separate PPP case, underscoring the office’s enforcement push. Federal prosecutors say they continue to prioritize tracking down and recovering funds stolen from relief programs.
Local reporting on the sentencing has highlighted the forfeiture order and the case’s ties to filings that date back to 2023, when the indictment was unsealed, and it has echoed federal calls for tips in pandemic-related fraud probes. As reported by Westside Current, the case is one of several that show relief-program abusers are still facing consequences in Los Angeles courts.
