An Orange County, California man who fraudulently obtained $5 million in pandemic relief loans and then spent the money on lavish vacations, luxury sports cars and his own personal expenses was sentenced Friday to 41/2 years in prison, federal prosecutors said.
Mustafa Qadiri, 42, of Irvine, had obtained the funds by submitting loan applications to the federal Paycheck Protection Program, which Congress created in March 2020 to provide emergency aid to small businesses struggling to survive amid COVID-19 related shutdowns and other business interruptions.
The loans were designed to prevent employee layoffs, and recipients were authorized to use the funds on payroll, rent or mortgage payments or utilities, but not on personal expenses.
Qadiri filed the applications in May and June of 2020 on behalf of four separate Newport Beach companies, none of which were actually in operation at the time, federal prosecutors said. Among other deceptions, he lied about the companies' employee numbers, falsified bank balances and created fake tax returns, officials said.
Then, money in hand, he started his personal spending spree — including by purchasing Ferrari, Bentley and Lamborghini sports cars, federal officials said.
Federal agents later seized the cars, along with more than $2 million from Qadiri's bank accounts, and a federal grand jury indicted him.
Qadiri pleaded guilty in July 2021 to bank fraud, aggravated identity theft and money laundering. In addition to his prison sentence, he was also fined $20,000 and ordered to pay more than $2.8 million in restitution.
Neither Qadiri nor his attorney could be reached for comment.
Several friends who wrote character references for Qadiri in federal court described him as a caring and generous man who was raised by his mother, an immigrant from Afghanistan, after his father died when he was a child.
They described Qadiri as becoming successful in business early in life, then suffering from alcohol abuse in recent years — which caused him to lose his way.
Qadiri requested in court filings that he be considered for the Federal Bureau of Prisons' residential drug abuse program.
Qadiri's case is just one example of what authorities have said is rampant fraud within federal programs established to relieve economic hardships created by the pandemic.
