Sussex County Resident Admits To Fraudulently Received $ 5.6 Million Loan To Help Small Businesses Amid COVID-19 Pandemic | USAO-NJ

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NEWARK, NJ. A man from Sussex County, New Jersey, admitted today that he had received more than $ 5 million in a fraudulent loan under the federal payroll protection (PPP) program, Acting Attorney Rachel A. Honig said.

Azhar Sarwar Rana, 30, from Newton, New Jersey, pleaded guilty before US District Judge Esther Salas to information in which he was charged with one count of bank fraud and one count of money laundering. Rana was previously arrested on December 12, 2020 after he booked a flight to Pakistan on the same day; he was charged with a complaint and appeared in court for the first time on 14 December 2020.

According to documents submitted in this case and statements made in court:

Rana filed a fraudulent application for a PPP loan to a lender on behalf of a legal entity, Azhar Sarvar Rana LLC, which allegedly invested in real estate development. The app falsified payroll and tax information and included internally conflicting numbers of employees. New Jersey Department of Labor records revealed that Azhar Sarvar Rana LLC did not pay wages in 2019, and the minimum wage it allegedly paid in 2020 was mainly for individuals whose Social Security numbers did not match theirs. names.

Based on Rana’s alleged misstatements, the lender approved Rana’s PPP loan application and provided Azhar Sarwar Rana LLC with approximately $ 5.6 million in federal COVID-19 emergency relief funds for low-income small businesses. Rana used the proceeds from the fraudulent loan to pay numerous personal expenses, including investing millions in the stock market, making payments to a luxury car dealership, and sending hundreds of thousands of dollars to accounts in Pakistan.

The Coronavirus Relief, Assistance and Economic Security Act (CARES) is a federal law enacted on March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans suffering from the economic fallout from the COVID-19 pandemic. One source of relief under the CARES Act is to allow up to $ 349 billion in non-repayable small business loans to save jobs and certain other expenses through PPPs. In April 2020, Congress authorized more than $ 300 billion in additional PPP funding.

PPP allows qualified small businesses and other organizations to obtain loans with a maturity of two years and an interest rate of 1 percent. Businesses must use proceeds from PPP loans to cover wages, mortgage interest, rent and utilities. PPP allows interest and principal to be forgiven if businesses spend proceeds on these costs for a set period of time and use at least a certain percentage of the loan to cover payroll costs.

Counting bank fraud carries the maximum possible penalty of 30 years in prison and a $ 1 million fine; The money laundering charge carries the maximum possible sentence of 10 years in prison and a $ 250,000 fine, which is double the total profit of the defendant or the greater loss of the victim, whichever is greater. The verdict will be announced on November 3, 2021.

Acting US Attorney Honig credited the FBI Special Agents under Executive Special Agent George M. Crouch Jr. in Newark; IRS Special Agents – Criminal Investigation, led by Special Agent Michael Montanez in charge; Special Agents of the Office of Social Security Inspector General of the New York Field Office under the direction of Special Agent John F. Grasso in charge; and Special Agents of the US Department of Homeland Security to investigate Homeland Security Investigations led by Special Agent in charge Peter K. Fitzhugh in New York, in an investigation that led to a plea today.

The government is represented by Assistant US Attorney Jennifer S. Kozar of the Economic Crime Investigation Unit of the US Attorney’s Office in Newark.

Anyone with information on allegations of attempted COVID-19 fraud can report it by calling the U.S. Department of Justice’s National Disaster Fraud Center at 866-720-5721 or via the web form NCDF Complaints to: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form

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