A Southern California man was arrested on federal charges Friday after federal authorities say he fraudulently obtained millions of dollars in coronavirus relief to buy luxurious cars, take lavish vacations and cover personal expenses.
Mustafa Qadiri, 38, of Irvine, nearly 40 miles southeast of Los Angeles, obtained about $5 million in Paycheck Protection Program money after claiming to own four businesses in nearby Newport Beach, none of which are in business, according to a federal indictment.
Qadiri submitted claims for All American Lending Inc., All American Capital Holdings Inc., RadMediaLab Inc., and Ad Blot Inc. in May and June 2020 with altered bank accounts, fake federal tax return forms and someone else's identity, according to the U.S. Attorney's Office of California. He then, the indictment says, used the money for vacations, personal expenses, and Ferrari, Bentley and Lamborghini sports cars.
All cars and $2 million from Qadiri's bank account were seized by federal agents when he surrendered himself to authorities Friday morning. He is charged with six counts of money laundering, four counts of bank fraud and wire fraud and one count of aggravated identity theft.
Federal agents have seized three luxury sports cars allegedly purchased by Mustafa Qadiri, 38, of Irvine, with fraudulently obtained COVID-19 Payment Protection Program (PPP) loans. pic.twitter.com/MIdkjFeZx2
— US Attorney L.A. (@USAO_LosAngeles) May 7, 2021
The PPP is part of the CARES Act approved by Congress in March 2020. It offered businesses employing 500 or fewer workers low-interest loans of up to $10 million, which often turn into grants, to cover pandemic-related costs. The U.S. Small Business Administration said more than 8.2 million loans have been approved as of March 21 for more than $718 billion.
But there are have been instances of people fraudulently applying for money, only for them to be arrested by federal authorities. California officials have said at least $11 billion has been issued in illicit unemployment claims, according to the Los Angeles Times.
Qadiri is being held on $100,000 bail. His trial is scheduled for June 29.
Follow Jordan Mendoza on Twitter: @jord_mendoza.
This article originally appeared on USA TODAY: COVID relief loan scams: California used $5M to purchase sports cars