IN IRVINE, CALIFORNIA – On federal charges, an Orange County man was arrested on allegations that he fraudulently received over $5 million in Payment Protection Program funds for his fictitious companies, and spent the money on himself, including buying Ferrari, Bentley, and Lamborghini luxury vehicles.
According to the US Attorney’s Office, Mustafa Qadiri, 38, of Irvine, was charged with four counts of bank robbery, four counts of wire fraud, one count of aggravated identity theft, and six counts of money laundering in a federal criminal indictment released Wednesday.
Qadiri reported to authorities and was scheduled to appear in federal court in Santa Ana on Friday afternoon.
According to the complaint, Qadiri alleged to have run four Newport Beach-based companies: All American Lending Inc., All American Capital Holdings Inc., RadMediaLab Inc., and Ad Blot Inc., none of which are currently operational. According to court documents, he reportedly sent fake and dishonest PPP loan applications to three banks on behalf of the firms in May and June of last year.
According to federal investigators, the falsified documents included the number of contractors of which the firms paid salaries, distorted bank account reports with inflated balances, and fabricated quarterly federal tax return forms. Qadiri reportedly applied for one of the loans using someone else’s identity, Social Security number, and signature.
According to the indictment, the banks financed the PPP loan applications and transferred around $5 million to accounts managed by Qadiri based on false evidence.
Qadiri is accused of misusing the fraudulently acquired PPP loan funds for his own personal gain, including the purchasing of expensive cars, extravagant holidays, and the paying of his personal expenses, all of which are banned under the PPP program’s provisions.
The Ferrari, Bentley, and Lamborghini cars that Qadiri bought with the supposedly dishonestly acquired PPP loans, as well as $2 million in suspected ill-gotten proceeds from his checking account, have been confiscated by government investigators.
The Coronavirus Aid, Relief, and Economic Security Act was enacted to provide emergency financial support to millions of Americans who were impacted by the COVID-19 pandemic’s economic consequences. The CARES Act authorizes up to $349 billion inexcusable loans to small companies for work retention and some other costs by the PPP, which is one form of relief. Congress approved more than $300 billion in new PPP spending in April.
Small companies and other organizations that apply may get loans with a two-year term and a 1% interest rate via the PPP. Payroll charges, mortgage interest, leases, and electricity would all be covered by PPP loan proceeds. If companies spend the proceeds of certain costs within a fixed time span and use at least a certain amount of the loan for payroll expenses, the PPP requires debt and principal to be forgiven.
