A man from Sussex County, New Jersey, is accused of fraudulently obtaining a loan of over $5 million from a federal COVID-19 relief program meant to help American businesses affected by the coronavirus pandemic.
Azhar Sarwar Rana, 30, of Newton, New Jersey, is charged with one count of bank fraud and one count of money laundering. He was considered a flight risk and was ordered held without bail. It is unclear if he has acquired legal representation.
According to the documents filed in the case, the accused allegedly submitted a fraudulent Paycheck Protection Program (PPP) loan application to a lender on behalf of his real estate development company, Azhar Sarwar Rana LLC.
The PPP is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was enacted by Congress on March 29, 2020. The loan program, which is administered by the Small Business Administration (SBA), is meant to provide emergency financial assistance to millions of American businesses that were negatively impacted by the pandemic. Congress authorized over $600 billion in forgivable loans for small businesses to use for job retention and certain other approved business-related expenses. Before the program ran out in August, it provided an estimated $525 billion to 5.2 million businesses.
The accused allegedly submitted falsified payroll and tax information and included internally inconsistent information about the number of workers his company employed. Records from the New Jersey Department of Labor purportedly show the company paid no wages in 2019, and the minimum wages it purportedly paid in 2020 were mostly to employees whose submitted Social Security numbers did not match their submitted names.
Despite these alleged inconsistencies, his loan was approved and funded and he was provided with approximately $5.6 million in emergency relief funds. He allegedly used the money to pay for numerous personal expenses, including making payments to a luxury car dealership, investing millions in the stock market, and sending hundreds of thousands of dollars to bank accounts in Pakistan.
The accused isn’t the first business owner suspected of committing fraud related to the PPP. The SBA has opened several hundred PPP-related investigations, involving hundreds of suspects and hundreds of millions of dollars of loans. The agency has publicly stated its commitment to ensuring PPP funds are used in accordance with the program’s intent.
As of late October, the Department of Justice has reportedly charged 73 individuals with fraud related to the COVID-19 programs. Many of the cases, like the defendant, in this case, involve allegations of forged documents or made-up companies. If convicted, the accused faces up to 30 years in prison and a $1 million fine for the bank fraud charge, and an additional 10 years in prison, and a $250,000 fine for the money laundering charge.
The penalties of federal fraud and money laundering charges are quite severe, which is why anyone suspected of committing fraud involving federal COVID-19 relief programs should immediately consult an experienced attorney. A good attorney can examine the evidence, conduct an independent investigation, and build a good defense.
South Florida Fraud Defense Attorney