A California man was ordered to pay millions in restitution and serve over four years in prison, after fraudulently obtaining $5m in federal Covid relief funds for sham businesses and spending the money on a lavish lifestyle.
Mustafa Qadiri, 42, of Irvine, was sentenced on Friday, according to federal officials, after pleading guilty in July 2021 to bank fraud, aggravated identity theft, and money laundering charges.
Prosecutors said the businessman orchestrated an elaborate scheme to obtain funding from the Paycheck Protection Program, which was established by Congress in 2020 to prop up small businesses impacted by the the pandemic.
“Qadiri used the fraudulently obtained PPP 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,” the Justice Department said in a press release.
According to the government, the 42-year-old submitted false bank balances, fake tax returns, and invented employee numbers, attached to non-operational businesses with names like All American Lending Inc., All American Capital Holdings Inc., RadMediaLab Inc., and Ad Blot Inc.
Once he was able to get a PPP loan, Qadiri used some of the money to go on a spending spree, buying Bentley, Ferrari and Lamborghini sports cars.
In addition to prison time, Qadiri was fined $20,000 and ordered to pay more than $2.8m in restitution.
Character witnesses for the Southern California business man said he was a kind person who lost his way thanks to an alcohol addiction. Qadiri reportedly requested to be placed in a prison-based federal addiction treatment programme.
Qadiri is far from the only one accused of scamming the PPP loan process.
Estimates suggest there was $80bn in fraud carried out on the $800bn programme.
