A man schemed to fraudulently obtain $5 million in COVID-19 relief funds for sham businesses and used the money to buy Ferrari, Bentley and Lamborghini sports cars, federal prosecutors in California say.
A federal grand jury recently indicted Mustafa Qadiri of Irvine, charging him with four counts of bank fraud, four counts of wire fraud, one count of aggravated identity theft, and six counts of money laundering.
Qadiri, 38, surrendered to authorities on May 7.
The indictment states the defendant claimed to be the proprietor of four Newport Beach-based companies: All American Lending, Inc., All American Capital Holdings, Inc., RadMediaLab, Inc., and Ad Blot, Inc.
None of the businesses was in operation, and in May and June 2020, “Qadiri allegedly submitted false and fraudulent Payment Protection Program loan applications to three banks on behalf of those companies,” according to the indictment. “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.”
The legal documents alleged Qadiri “used someone else’s name, Social Security number and signature to fraudulently apply for one of the loans.”
Qadiri allegedly then directed the $5 million in PPP COVID-19 relief funds from banks to accounts he controlled, the indictment states.
Prosecutors alleged he used the loan proceeds “for his own personal benefit, including for expenses prohibited under the requirements of the PPP program, such as the purchase of luxury vehicles, lavish vacations, and the payment of his personal expenses,” according to the documents.
Federal agents have seized the sports cars and $2 million from Qadiri’s bank account, the indictment shows.
The DOJ explained the potentially forgivable PPP loans are meant for small businesses and the money must be used on payroll costs, rent, utilities, and interest on mortgages.