A man from Newton has admitted illegally obtaining a $ 5.6 million COVID relief loan for struggling businesses during the pandemic.
Azhar Sarwar Rana, 30, pleaded guilty on Thursday to bank fraud and money laundering in federal court, according to a statement from the US prosecutor’s office. He was arrested on December 12, 2020 as he was leaving his home and was going to board a flight the same day to Pakistan.
Rana received money from the Federal Paycheck Protection Program after falsifying payroll and tax information for his alleged real estate development company, Azhar Sarwar Rana LLC.
In his loan application, Rana said he had 11 employees, not including himself or his family. He first said his monthly payroll was $ 722,352, but then changed it to say it was closer to $ 1.4 million, asking for a $ 10 million loan, according to the complaint.
Relief: 4 recovery plans for the coronavirus. $ 2.4 trillion in funding. See what this means for the national debt.
He used the millions he received to buy stock market investments and a luxury car. He also sent hundreds of thousands of dollars to bank accounts in Pakistan.
New Jersey Department of Labor records showed Rana’s company paid no wages for 2019 and wages for 2020 were for people whose Social Security numbers did not match the names submitted, according to the press release.
Rana faces up to 40 years in federal prison and fines of $ 1.25 million.
The Coronavirus, Relief and Economic Security Act (CARES) was passed in March 2020 to provide emergency financial assistance to people facing economic hardship due to the pandemic. The CARES Act authorized up to $ 349 billion in forgivable loans for small businesses, and additional PPP funding of $ 300 billion was authorized the following month.
Earlier this year: Biden changes paycheck protection program to better target nation’s smallest businesses
Eligible businesses could receive loans with a two-year maturity and one percent interest rate and the loans must be used for payroll, mortgage interest, rent, and utilities. The loan is repayable if the money is spent on these specific expenses within a specified time and a certain percentage is to be used for payroll.
Congressional investigators also found that thousands of ineligible businesses had received loans, despite many businesses blaming the program for maintaining operations after the shutdown, according to a report released in September.
In November 2020, a man from Hackettstown was also accused of fraudulently obtaining $ 1.8 million in PPP loans.
Kaitlyn Kanzler covers Essex County for NorthJersey.com. To access the most important news from your local community, please subscribe or activate your digital account today.
Email: [email protected]
Twitter: @ KaitlynKanzler8