Pakistani American admits to $5.6m loan fraud in the US
Representational image (iStock)
A Pakistani American man in the US has admitted that he fraudulently obtained a federal Paycheck Protection Program (PPP) loan of over $5 million meant to help small businesses during the Covid-19 pandemic.
Azhar Sarwar Rana, 30, of Newton, New Jersey, pleaded guilty before US district judge Esther Salas to one count of bank fraud and one count of money laundering.
Rana was arrested on December 12, 2020, after he booked a same-day flight to Pakistan. Later, he was charged by complaint and made his initial appearance on December 14.
The sentencing in the case is scheduled for November 3, 2021.
Rana submitted a fraudulent PPP loan application to a lender on behalf of a corporate entity, Azhar Sarwar Rana LLC, that purportedly invested in real estate development. The application falsified payroll and tax information and included internally inconsistent listings of the number of company employees, according to documents filed in the court.
But, the New Jersey department of labour records showed that the company paid no wages in 2019, and the minimum wages it purportedly paid in 2020 were mostly to individuals whose submitted Social Security numbers did not correspond to their submitted names.
Based on Rana’s alleged misrepresentations, the lender approved Rana’s PPP loan application and provided the company with around $5.6 million.
The court heard that Rana used the loan proceeds to pay for numerous personal expenses, including to invest millions in the stock market, make a payment to a luxury car dealership, and send hundreds of thousands of dollars to accounts in Pakistan.
The count of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine, and the count of money laundering carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater.
The government is represented by Assistant US Attorney Jennifer S Kozar of the US Attorney’s Office Economic Crimes Unit in Newark.