Admin l Thursday, May 20, 2021
TEXAS, United States – A Texas man by name Fahad Shah(44) has pleaded guilty 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.
According to court documents, Shah admitted that he sought over $3 million in PPP loans from two different SBA-approved lenders. In the first application , he submitted to one lender, 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, 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. According to court documents, WBF had only two employees. In connection with both PPP loan applications, Shah submitted fraudulent Employer’s Quarterly Federal Tax Return (IRS Form 941) documents for 2019.
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 to pay off his home mortgage, purchase securities through his personal investment account, and bought two Teslas, two Freightliner trucks, and a Mercedes Benz van.
Shah pleaded guilty to one count of wire fraud. He is scheduled to be sentenced at a future date and faces a maximum sentence of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Nicholas Ganjei of the U.S. Attorney’s Office for the Eastern District of Texas; Special Agent in Charge Amaleka McCall-Brathwaite of the SBA – Office of Inspector General (SBA-OIG); Special Agent in Charge Catherine Huber of the Federal Housing Finance Agency – OIG (FHFA-OIG); Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation – OIG (FDIC-OIG); Acting Special Agent in Charge Mark Pearson of the IRS Criminal Investigation (IRS-CI) Dallas Field Office; and Inspector General J. Russell George of the Treasury Inspector General for Tax Administration (TIGTA) made the announcement.
