Seven Individuals Indicted in Connection with COVID-Relief Fraud Scheme

Seven Individuals Indicted in Connection with COVID-Relief Fraud Scheme

Seven persons across 2 states were indicted in a charge unsealed on 17th November 2020 for their purported role in a scheme to collect nearly 16 million USD in pardonable PPP (Paycheck Protection Program) loans guaranteed by SBA (Small Business Administration) under the CARES (Coronavirus Aid, Relief and Economic Security) Act.

Rifat Bajwa, age 51, from Richmond, Texas; Mauricio Navia, age 41, from Katy, Texas; Mayer Misak, age 40, from Cypress, Texas; Richard Reuth, age57, from Spring Texas; and Amir Ajeel, age 52, and Pardeep, age 51, both from Houston, Texas, were supposed to make their first appearance in front of U.S. Magistrate Judge Mathew M. Edison.

They were collectively indicted with wire fraud and conspiracy to perpetrate wire fraud. The charge also indicted Ageel with 3 counts of money laundering.

Also mentioned in the Houston charge was Siddiq Azeemuddin, age 41, from Naperville, Illinois. He was also charged with conspiracy to perpetrate wire fraud, money laundering, and wire fraud. Azeemuddin appeared in front of U.S. Magistrate Judge of the Northern District of Illinois Heather K. Mcshain on 17th November 2020.

Acting Assistant Attorney General of the Justice Department’s Criminal Division Brian C. Rabbitt said that the defendants purportedly took part in a scheme to take advantage of the pandemic by submitting at least eighty fraudulent PPP registrations and enriching themselves by 16 million USD, using the money to purchase luxury items like a Lamborghini and Porsche vehicles. He added that his department and other law enforcement liaisons would proceed to assertively seek those who would attempt to unlawfully take advantage of the advancing national crisis for their own personal gain.

U.S. Attorney of the Southern District of Texas Ryan K. Patrick said that some fraudsters invented the most complex schemes to rob money from citizens. He added that the fraudsters’ actions could be very fruitful if they used their inventions and effort in good and important work. He further added that with many liaison agencies’ outstanding efforts, they would bring the individuals who robbed the treasury to justice.

Special Agent in Charge of the SBA-OIG (Office of Inspector General) Central Division Sharon Johnson said that gluttony had no place in the SBA’s programs meant to offer help to the country’s small enterprises facing the challenges of the pandemic. She added that the OIG and its law enforcement liaisons would tirelessly seek fraudsters and bring them to face the law. She appreciated the U.S. Attorney General’s Office and other law enforcement liaisons for their commitment and hunt for justice.

Special Agent in Charge of U.S. Immigration and Customs Enforcement’s HSI (Homeland Security Investigations) Houston Mark B. Dawson said that the defendants are claimed to have swindled a program meant to help hardworking taxpayers who had been unfairly affected as a consequence of the new and challenging health pandemic. He added that HSI was dedicated to collaborating with law enforcement liaisons to bring every resource to hold up against anyone who sought to exploit the global health crises to harm and swindle others for their own selfish gains intentionally.

Special Agent in Charge of the FHFA (Federal Housing Finance Agency) OIG, Central Region Catherine Huber said that to assist small and community banks, Federal Housing Finance Agency could collect PPP (Payback Protection Program) as security when giving loans to their members. She added that the Office of Inspector General was honored to collaborate with their law enforcement liaisons to avert, determine, and discourage efforts to commit fraud in Federal Home Loan Bank System and rob the held meant for small enterprises owners and workers under the crucial part of the CARES Act.

Special Agent in Charge of the FDIC (Federal Deposit Insurance Corporation) OIG Laurie L.  Younger said that the charge described notable misuse of public finances intended for struggling taxpayers enterprises and families. She added that the purported fraud indicated considerable, awful, and organized actions that eroded the faith of the financial programs and systems sanctioned by Congress to help the country recuperate from the economic damage caused by the coronavirus pandemic. She applauded the law enforcement liaisons for their help in the investigation.

TIGTA( Treasury Inspector General for Tax Administration), J. Russell George said that the Treasury Inspector General for Tax Administration assertively sought those who attempted to swindle programs offered to the taxpayers under Coronavirus Aid, Relief and Economic Security Act. He commended the attempts of the U.S. Department of Justice and other law enforcement liaisons for their hard work.

The charge purported that all conspired to present over eighty fraudulent PPP loan registrations by forging the average monthly payroll costs of the applicant enterprises and the number of workers. According to the indictment, in the encouragement of these fraudulent loan registrations, they conspired to present, and did present, fraudulent bank statements and/or falsified federal tax documents. Some of the PPP registration were purportedly presented on behalf of the enterprises managed by the defendants.

According to the charge, additional loan requests were presented on behalf of institutions that third parties purportedly possessed. In trade for these, some of the defendants collected large kickbacks, according to the indictment.

The charge further purports that the conspirators laundered a part of the fraudulent gains by writing checks from enterprises that accepted PPP loans to fake workers. According to the indictments, those that collected checks comprised of a number of the defendants and their families. The falsified paychecks were then purportedly cashed at Fascare International Inc. dba Almeda Discount Store – a cash checking enterprise possessed by Azeemuddin.

The charge purports that more than 1,100 falsified paychecks amounting to over 3 million USD in fraudulent PPP loan profits were cashed at Azeemuddin’s enterprise.

Federal agents, in addition, performed forty-five seizure warrants in concurrence with the case. Part of the items seized comprised of a Lamborghini, and a Porsche purportedly bought with unlawfully acquired funds.

The investigation for the case is still ongoing. If any person has information about this fraud, please call the Department of Homeland Security at 1-866-DHS-2-ICE.

The CARES Act is a federal law sanctioned on 29th March 2020, intended to offer emergency financial help to the millions of American citizens who are facing the economic impacts caused by the coronavirus pandemic. One source of aid offered by the CARES Act was the approval of approximately 349 billion USD in pardonable loans to small enterprises for job retention and certain other costs via the PPP. In April 2020, Congress approved 300 billion USD to advance PPP funding.

The PPP permits eligible small-enterprises and other institutions to collect loans with an interest of 1% and a maturity of 2 years. PPP loan gains must be utilized by the enterprise rent, payroll expenses, utilities, and mortgages’ interests. The PPP permits the principal and the interest on the PPP loan to be pardoned if the enterprise uses the loan gains on these costs within a specified period of time after obtaining the gains and utilizes not less than a certain percentage of the PPP gains on payroll costs.

A federal criminal charge is just an allegation. A defendant is considered innocent until or unless proven guilty beyond a reasonable doubt in a federal court.

The investigations for this case was conducted by TIGTA, SBA-OIG, FHFA-OIG, HSI, and FDIC-OIG. The prosecution for this case was handled by U.S. Assistant Attorneys for the Southern District of Texas Rodolfo Ramirez and Kristine Rollinson and Trial Attorneys of the Criminal Division’s Fraud Section Louis Manzo and Della Sentilles.

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