Sussex County Man Admits Fraudulent Obtaining $ 5.6 Million Loan To Help Small Businesses During COVID-19 Pandemic | USAO-NJ


NEWARK, NJ – A man in Sussex County, New Jersey today admitted to fraudulently obtaining a federal Paycheck Protection Program (P3P) loan of more than $ 5 million, the prosecutor said Acting Rachael A. Honig.

Azhar Sarwar Rana, 30, of Newton, New Jersey, pleaded guilty before U.S. District Judge Esther Salas to information accusing her of one count of bank fraud and one count of money laundering. Rana had previously been arrested on December 12, 2020, after having booked a flight the same day to Pakistan; he was charged by complaint and first appeared on December 14, 2020.

According to the documents filed in this case and the statements made in court:

Rana submitted a fraudulent PPP loan application to a lender on behalf of a legal person, Azhar Sarwar Rana LLC, which allegedly invested in real estate development. The app falsified salary and tax information and included inconsistent internal lists of the number of employees at the company. New Jersey Department of Labor records showed that Azhar Sarwar Rana LLC paid no wages in 2019 and that the minimum wage he would have paid in 2020 was primarily for people with submitted social security numbers. did not match their submitted names.

Based on Rana’s alleged misrepresentation, 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 small businesses. companies in difficulty. Rana used the proceeds of the fraudulently obtained PPP loan to pay for many personal expenses, including investing millions in the stock market, making a payment to a luxury car dealership, and sending hundreds of thousands of dollars to accounts in Pakistan.

The CARES Act (Coronavirus Aid, Relief, and Economic Security) is a federal law enacted on March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the pandemic of COVID-19. One source of relief under the CARES Act is the authorization of up to $ 349 billion in forgivable loans to small businesses for job retention and certain other expenses under the PPP. In April 2020, Congress authorized more than $ 300 billion in additional P3 funding.

The PPP allows small businesses and other eligible organizations to receive loans with a two-year term and an interest rate of 1%. Businesses must use the proceeds of the PPP loan for salary costs, mortgage interest, rent, and utilities. The PPP allows for the forgiveness of interest and principal if companies spend the proceeds of these expenses within a specified time frame and use at least a certain percentage of the loan for salary expenses.

The bank fraud count carries a potential maximum sentence of 30 years in prison and a fine of $ 1 million; the money laundering count carries a potential maximum penalty of 10 years in prison and a fine of $ 250,000, or double the gross gain for the defendant or the gross loss for the victim , whichever is greater. Sentencing is scheduled for November 3, 2021.

Acting US Attorney Honig credited the FBI Special Agents, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; IRS Special Agents – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; special agents of the Inspector General’s Office of Social Security Administration, New York Field Division, under the direction of Special Agent in charge John F. Grasso; and US Department of Homeland Security Special Agents, Homeland Security Investigations, under the direction of Special Agent in Charge Peter C. Fitzhugh in New York City, the investigation leading to today’s guilty plea.

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

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https: //www.justice. gov / disaster-fraud / ncdf-disaster-complaint-form.

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