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Chaka Fattah, Jr., Sentenced To Five Years In Prison For Fraud And Tax Charges

6a00d8341bf7d953ef01b8d147a14f970c-320wiPHILADELPHIA – Chaka Fattah, Jr., 33, of Philadelphia, PA, was sentenced today to 60 months in prison for 22 counts that included fraud and tax charges.  On November 5, 2015, a federal jury found Fattah, Jr., guilty of bank fraud; making false statements to banks to obtain loans; making false statements to banks and the Small Business Administration to settle loans for less than what was owed; filing false federal income tax returns for tax years 2005, 2006, and 2008; failing to pay federal income tax; wire fraud; and theft from a program receiving federal funds.  In addition to the prison term, U.S. District Court Judge Harvey Bartle III ordered restitution in the amount of $1,172,175, five years of supervised release, and a $2,125 special assessment.

 Fattah, Jr., obtained numerous business lines of credit through false and fraudulent statements to local banks and used the funds primarily for personal expenses, rather than business expenses as the loan terms required.  These false statements involved fictitious earnings information that Fattah, Jr., and an associate supplied for entrepreneurial companies which Fattah and the associate claimed they operated, including 259 Strategies, LLC (“259 Strategies”) and Chaka Fattah, Jr. & Associates.  

In 2011, Fattah, Jr., received a loan from United Bank for $50,000 intended for "working capital to support business operations."  Instead, he used the funds to make car payments, to pay down more than $40,000 in personal debt, including gambling debts.   

Fattah, Jr., defaulted on several lines of credit and provided false information to two banks, to the United States Small Business Administration, which had insured the bank loans, and to a Small Business Administration investigator, to attempt to settle the debts for less than what was owed.  Fattah, Jr., falsely claimed that 259 Strategies was out of business at the time he was attempting to settle his debts in 2010, and that he was earning only $2,500 per month.  In fact, during 2010, Fattah, Jr.’s 259 Strategies, LLC was intact and he was earning between $6,250 per month and approximately $37,500 per month.

Fattah, Jr. filed false federal income tax returns and failed to pay federal taxes for tax years 2005, 2006, and 2008, and failed to timely pay taxes owed on his 2010 earnings, for a total loss to the IRS of more than $92,000.

Fattah, Jr., also stole funds supplied by the federal government to the Philadelphia School District.  Fattah, while the Chief Operating Officer of Delaware Valley High School, a for-profit vendor which provided alternative educational services to the school district, provided false and fictitious expense information and inflated salary figures on budgets submitted to the school district.  The school district made payments to Delaware Valley consistent with the budgets, and thus were defrauded of approximately $940,000 during the 2010-2011 and 2011-2012 school years.  Some of those funds were paid through a false budget entry which concealed the true recipient of the payments, Fattah.