California Man Arrested for Fraudulently Obtaining $5M in COVID Relief Funds (Dreamstime)
By Brian Freeman | Sunday, 09 May 2021 10:24 PM
An Irvine, California, man has been arrested after federal authorities said he fraudulently received $5 million in coronavirus relief funds to purchase luxurious cars and go on expensive vacations, USA Today reported over the weekend.
Mustafa Qadiri obtained the money from Payment Protection Program after he said he owned 4 businesses, but a federal indictment said none of them were actually currently operating.
"Qadiri allegedly submitted false and fraudulent PPP loan applications to 3 banks on behalf of companies," the U.S. Attorney's Office of California wrote in a statement. "The false information allegedly included the number of employees to whom the companies paid wages, altered bank account records with inflated balances, and fictitious quarterly federal tax return forms. Qadiri allegedly also used someone else's name, Social Security number, and signature to fraudulently apply for one of the loans."
The banks then funded the PPP loan applications. The statement continued, federal agents "seized the Ferrari, Bentley, and Lamborghini cars that Qadiri allegedly purchased with the fraudulently obtained PPP loans, along with $2 million in alleged ill-gotten gains from his bank account," which he had also been using to cover additional personal expenses.
Qadiri surrendered himself to authorities Friday and is charged with 6 counts of money laundering, 4 counts of bank fraud and wire fraud and 1 count of aggravated identity theft.
Qadiri is being held on $100,000 bail, with his trial scheduled to begin June 29, USA Today reported.
The PPP is part of the CARES Act that was passed by Congress in March last year and offered businesses with 500 or fewer workers low-interest loans of up to $10 million, which frequently became grants in order to cover costs related to the pandemic.
California officials said in January they have confirmed at least $11.4 billion in unemployment benefits paid during the pandemic involve fraud, which is about 10% of the overall benefits paid in the state, the Los Angeles Times reported.
In addition, California is looking into another 17% of benefits, worth about $19 billion, involving suspicious claims that have not yet been proven to be fraudulent.