An Orange County man has been arrested on federal charges alleging he fraudulently obtained approximately $5 million in Paycheck Protection Program (PPP) loans for his “sham businesses,” and used the money to buy fancy sports cars, the Department of Justice announced Friday.
Mustafa Qadiri, 38, of Irvine, is being charged with four counts of bank fraud, four counts of wire fraud, one count of aggravated identity theft, and six counts of money laundering, according to a federal grand jury indictment.
Qadiri surrendered to authorities Friday morning.
Federal agents seized a Ferrari, Bentley and Lamborghini that Qadiri allegedly purchased with the fraudulently obtained PPP loans, along with $2 million in alleged ill-gotten gains from his bank account, the DOJ reported.
According to the indictment, in May and June of 2020 Qadiri claimed to have operated four Newport Beach-based companies, All American Lending, Inc., All American Capital Holdings, Inc., RadMediaLab, Inc., and Ad Blot, Inc., and submitted false and fraudulent PPP loan applications to three banks.
The DOJ said none of the companies are currently in operation.
The false information included in the PPP loan applications allegedly included the number of employees to whom the companies paid wages, altered bank account records with inflated balances, and fictitious quarterly federal tax return forms.
The DOJ also alleged Qadiri used someone else’s name, Social Security number and signature to fraudulently apply for one of the loans.
Relying on this false information, the banks funded the PPP loan applications and transferred approximately $5 million to accounts Qadiri controlled, according to the indictment.
In addition to the fancy sports cars, Qadiri also allegedly used the fraudulently obtained PPP loan money for his own personal benefit, including lavish vacations and the payment of his personal expenses.
Qadiri was expected to make his initial appearance Friday afternoon in United States District Court in Santa Ana.