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Sussex County man sentenced to 64 months in prison for fraudulently securing $ 5.6 million loan to help small businesses during COVID-19 pandemic | USAO-NJ

NEWARK, NJ – A man in Sussex County, New Jersey was sentenced today to 64 months in prison for fraudulently obtaining a federal Paycheck Protection Program (P3P) loan of more than $ 5 million dollars, Interim Prosecutor Rachael A. Honig said.

Azhar Sarwar Rana, 31, of Newton, N.J., had previously pleaded guilty before U.S. District Judge Esther Salas to information accusing her of one count of bank fraud and one count of money laundering . Judge Salas handed down the sentence today in Federal Court in Newark.

According to the documents filed in this case and the statements made in court:

Rana submitted a fraudulent PPP loan application to a lender on behalf of a legal person, Azhar Sarwar Rana LLC, which allegedly invested in real estate development. The app falsified payroll and tax information and included inconsistent lists internally of the number of employees at the company. New Jersey Department of Labor records showed that Azhar Sarwar Rana LLC paid no wages in 2019 and that the minimum wage he would have paid in 2020 was primarily for people with submitted Social Security numbers. did not match their submitted names.

Based on Rana’s misrepresentation, lender approved Rana’s PPP loan application and provided Azhar Sarwar Rana LLC with approximately $ 5.6 million in federal COVID-19 emergency relief funds for small businesses in trouble. Rana used the proceeds from the fraudulently obtained PPP loan to pay for many personal expenses, including investing millions in the stock market, making a payment at a luxury car dealership, and sending hundreds of thousands of dollars to accounts in Pakistan. Rana was arrested on December 12, 2020, after booking a flight the same day to Pakistan.

The CARES (Coronavirus Aid, Relief, and Economic Security) law is a federal law enacted on March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the pandemic of COVID-19. One source of relief provided by the CARES Act is the authorization of up to $ 349 billion in forgivable loans to small businesses for job retention and certain other expenses under the PPP. In April 2020, Congress authorized more than $ 300 billion in additional P3 funding.

The PPP allows small businesses and other eligible organizations to receive loans with a two-year term and an interest rate of 1%. Businesses must use the proceeds of the PPP loan for salary costs, mortgage interest, rent, and utilities. The PPP allows for forgiveness of interest and principal if companies spend the proceeds of those expenses within a specified time frame and use at least a certain percentage of the loan for salary expenses.

In addition to the prison term, Judge Salas sentenced Rana to five years on probation and ordered the restitution of $ 5.58 million. A $ 5.68 million confiscation order was issued in September 2021.

Acting US Attorney Honig credited the FBI Special Agents, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; IRS Special Agents – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; special agents of the Inspector General’s Office of Social Security Administration, New York Field Division, under the direction of Inspector General Gail S. Ennis; and US Department of Homeland Security Special Agents, Homeland Security Investigations, under the direction of Acting Special Agent in charge Ricky J. Patel in New York City, the investigation leading to today’s conviction.

The government is represented by Deputy US Prosecutors Jennifer S. Kozar and Carolyn Silane of the Economic Crimes Unit of the US Attorney’s Office in Newark.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Disaster Fraud Control Center hotline at 866-720- 5721 or via the NCDF web complaint form at: https: //www.justice. gov / disaster-fraud / ncdf-disaster-complaint-form.

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