SANTA ANA (CNS) – An Orange County man was arrested on Friday on federal charges for alleging he had fraudulently received $ 5 million in payment protection program loans for his bogus businesses, and then the money used for himself, including buying Ferrari, Bentley, and Lamborghini sports cars.
What you need to know
- Mustafa Qadiri, 38, has been charged four cases of bank fraud, four cases of wire transfer fraud, one case of serious identity theft and six cases of money laundering
- Qadiri surrendered to law enforcement
- Qadiri is alleged to have used the fraudulently obtained PPP loan proceeds for his personal gain
- Federal agents have seized the Ferrari, Bentley and Lamborghini cars that Qadiri bought using the PPP loans allegedly fraudulently obtained
Mustafa Qadiri, 38, of Irvine, was named in a federal grand jury indictment that was dismissed on Wednesday and charged with four cases of bank fraud, four cases of wire transfer fraud, one case of aggravated identity theft and six cases of money laundering U.S. Public prosecutor.
Qadiri surrendered to law enforcement and was due to appear in Santa Ana Federal Court for the first time on Friday afternoon.
According to the indictment, Qadiri alleged to have operated four Newport Beach-based companies, none of which are currently operating: All American Lending Inc., All American Capital Holdings Inc., RadMediaLab Inc., and Ad Blot Inc. as of May and June of Last year, according to court files, he allegedly submitted false and fraudulent PPP loan applications to three banks on behalf of these companies.
The wrong information included the number of employees the companies paid wages to, changed bank accounts with excessive balances, and fictitious quarterly federal tax return forms, according to federal prosecutors. Qadiri is also alleged to have used someone else’s name, social security number and signature to fraudulently apply for one of the loans.
Based on the false information, the banks financed the PPP loan applications and, according to the indictment, transferred around US $ 5 million to accounts controlled by Qadiri.
Qadiri is alleged to have used the fraudulently obtained PPP loan proceeds for his personal benefit, including spending prohibited under the requirements of the PPP program, such as buying luxury vehicles, lavish vacations, and paying his personal expenses.
Federal agents have confiscated the Ferrari, Bentley and Lamborghini cars that Qadiri purchased using the allegedly fraudulently obtained PPP loans, along with $ 2 million in alleged ill-gotten gains from his bank account.
The Coronavirus Aid, Relief and Economic Security Act is designed to provide emergency financial aid to millions of Americans suffering from the economic impact of the COVID-19 pandemic. One source of relief from the CARES Act is the approval of up to $ 349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress approved more than $ 300 billion in additional PPP funding.
The PPP enables qualified small businesses and other organizations to obtain loans with a term of two years and an interest rate of 1%. Businesses must use PPP loan proceeds for labor costs, mortgage interest, rent, and utilities. The PPP enables the inheritance of interest and principal when companies spend the proceeds on those expenses within a certain period of time and use at least a certain percentage of the loan on salary expenses.