[Texas] $3m PPP loan fraudster could get 20-year prison term

A Texas man has entered a guilty plea to filing fraudulent loan applications seeking more than $3 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Herald Democrat reports.

According to court documents, Fahad Shah (44) admitted to applying for over $3 million in PPP loans from two different SBA-approved lenders. In the first application submitted to one lender, Mr Shah sought over $1.7 million in PPP loan proceeds by fraudulently claiming that his company, WBF Weddings by Farah Inc. (WBF), employed 126 individuals with an average monthly payroll of over $700,000. 

In the second application, Mr Shah sought over $1.5 million in PPP loan proceeds by fraudulently claiming that WBF had 126 employees with an average monthly payroll of over $600,000. In reality, according to court documents, WBF had only two employees. In connection with both PPP loan applications, Mr Shah submitted fraudulent Employer’s Quarterly Federal Tax Return (IRS Form 941) documents for 2019.

“PPP loans were intended to help businesses keep themselves and their employees afloat during the COVID-19 pandemic,” Acting US Attorney Nicholas J. Ganjei said.  “PPP loans were not, and never were, intended to serve as personal loans for personal use.  By applying and qualifying for PPP funds on fraudulent grounds, Fahad Shah took advantage of the COVID-19 economic crisis to enrich himself and his family.  

“By seeking a loan that he should not have received, Shah helped to deplete the amount of funds available to all potential legitimate borrowers who really needed financial support.  This plea shows that the Eastern District of Texas is dedicated to pursuing fraudsters and ensuring they do not benefit from their crimes.”

Mr Shah admitted that he obtained over $1.5 million in PPP loan proceeds. Within days of receiving the PPP funds, Shah used over $1 million in fraudulently obtained proceeds to pay off his home mortgage, purchase securities through his personal investment account, and buy two Teslas, two Freightliner trucks, and a Mercedes Benz van.

He was indicted by a federal grand jury on June 18, 2020, and subsequently pled guilty to wire fraud. Under federal statutes, Mr Shah now faces up to 20 years in federal prison. A sentencing hearing will be scheduled after the completion of a presentence investigation by the US Probation Office.

A Texas man has entered a guilty plea to filing fraudulent loan applications seeking more than $3 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Herald Democrat reports.

According to court documents, Fahad Shah (44) admitted to applying for over $3 million in PPP loans from two different SBA-approved lenders. In the first application submitted to one lender, Mr Shah sought over $1.7 million in PPP loan proceeds by fraudulently claiming that his company, WBF Weddings by Farah Inc. (WBF), employed 126 individuals with an average monthly payroll of over $700,000. 

In the second application, Mr Shah sought over $1.5 million in PPP loan proceeds by fraudulently claiming that WBF had 126 employees with an average monthly payroll of over $600,000. In reality, according to court documents, WBF had only two employees. In connection with both PPP loan applications, Mr Shah submitted fraudulent Employer’s Quarterly Federal Tax Return (IRS Form 941) documents for 2019.

“PPP loans were intended to help businesses keep themselves and their employees afloat during the COVID-19 pandemic,” Acting US Attorney Nicholas J. Ganjei said.  “PPP loans were not, and never were, intended to serve as personal loans for personal use.  By applying and qualifying for PPP funds on fraudulent grounds, Fahad Shah took advantage of the COVID-19 economic crisis to enrich himself and his family.  

“By seeking a loan that he should not have received, Shah helped to deplete the amount of funds available to all potential legitimate borrowers who really needed financial support.  This plea shows that the Eastern District of Texas is dedicated to pursuing fraudsters and ensuring they do not benefit from their crimes.”

Mr Shah admitted that he obtained over $1.5 million in PPP loan proceeds. Within days of receiving the PPP funds, Shah used over $1 million in fraudulently obtained proceeds to pay off his home mortgage, purchase securities through his personal investment account, and buy two Teslas, two Freightliner trucks, and a Mercedes Benz van.

He was indicted by a federal grand jury on June 18, 2020, and subsequently pled guilty to wire fraud. Under federal statutes, Mr Shah now faces up to 20 years in federal prison. A sentencing hearing will be scheduled after the completion of a presentence investigation by the US Probation Office.