Sussex County Man Admits Fraudulent Receipt of $ 5.6 Million Mortgage to Assist Small Companies Throughout COVID-19 Pandemic | USAO-NJ

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  Four charged with Covid-19 fraud |  USAO-AZ

NEWARK, NJ – A Sussex County, New Jersey man today admitted fraudulently receiving a federal paycheck protection program (PPP) loan of over $ 5 million, U.S. Attorney Rachael A. Honey with.

Azhar Sarwar Rana, 30, of Newton, New Jersey, pleaded guilty to U.S. District Judge Esther Salas on charges of bank fraud and one money laundering charge. Rana was previously arrested on December 12, 2020 after booking a flight to Pakistan on the same day; he was charged with a complaint and appeared for the first time on December 14, 2020.

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

Rana submitted a fraudulent PPP loan application to a lender on behalf of a company, Azhar Sarwar Rana LLC, that allegedly invested in property development. The application falsified salary and tax information and contained internally conflicting information about the number of employees in the company. New Jersey Department of Labor records showed that Azhar Sarwar Rana LLC was not paying wages in 2019, and the minimum wages allegedly paid in 2020 went mostly to people whose social security numbers submitted did not match their submitted names.

Due to Rana’s alleged misrepresentations, the lender approved Rana’s PPP loan application and provided approximately $ 5.6 million to Azhar Sarwar Rana LLC to federal COVID-19 emergency fund for distressed small businesses. Rana used the fraudulently obtained PPP loan proceeds to pay for numerous personal expenses, including investing millions in the stock market, making a payment to a luxury car dealership, and transferring hundreds of thousands of dollars to accounts in Pakistan.

The Coronavirus Aid, Relief and Economic Security (CARES) Act is federal law that went into effect on March 29, 2020. It is designed to provide emergency financial aid to millions of Americans suffering the economic effects of the COVID-19 pandemic. One source of relief from the CARES Act is the PPP’s approval of up to $ 349 billion in forgivable loans to small businesses for job retention and certain other expenses. In April 2020, Congress approved over $ 300 billion in additional PPP funding.

The PPP enables qualified small businesses and other organizations to obtain loans with a term of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for labor costs, mortgage interest, rent, and utilities. The PPP enables the inheritance of interest and principal when companies spend the proceeds on these expenses within a certain period of time and use at least a certain percentage of the loan on salary expenses.

The bank fraud charge carries a maximum possible sentence of 30 years in prison and a fine of $ 1 million; the number of money launders carries a maximum possible penalty of 10 years in prison and a fine of $ 250,000 or double the gross profit for the accused or the gross loss for the victim, whichever is greater. The conviction is scheduled for November 3, 2021.

Acting US Attorney Honey has credited FBI special agents under the direction of special agent in charge George M. Crouch Jr. in Newark; Special Agents of the IRS – Criminal Investigation, led by Special Agent in Charge Michael Montanez; Special Agents of the Inspector General’s Social Security Administration Bureau, New York Field Division, under the direction of responsible Special Agent John F. Grasso; and Department of Homeland Security Special Agent Homeland Security Investigations, under the direction of Special Agent in Charge Peter C. Fitzhugh of New York, whose investigation resulted in today’s admission of guilt.

The government is represented by Assistant Attorney General Jennifer S. Kozar of the White Collar Crime Division of the US Attorney’s Office in Newark.

Anyone with information about suspected COVID-19-related fraud can report this by calling the Department of Justice’s National Center for Disaster Fraud hotline at 866-720-5721 or using the NCDF web complaint form at: https: / /www.justice. gov / disaster-fraud / ncdf-disaster-complaint-form.