Multi-million Dollar COVID Relief Scheme

Just when you thought that no one could do anything any more stupid, here is another story of an actual business owner creating a scheme to defraud the SBA once again. Here is an excerpt from the filings found on the Department of Justice website.

“Two individuals pleaded guilty today in the Southern District of Texas for their participation in a scheme to fraudulently obtain and launder millions of dollars in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security Act.

According to court documents, Siddiq Azeemuddin, 42, of Naperville, Illinois, and Raheel Malik, 41, of Sugar Land, Texas, engaged in a scheme to defraud the SBA and certain SBA-approved PPP lenders by submitting false and fraudulent PPP loan applications. Azeemuddin and Malik also conspired to and did launder over $3 million in PPP loan funds through Azeemuddin’s business, Fascare International Inc., dba Almeda Discount Store (Almeda). As part of the scheme, Azeemuddin instructed Malik to fill out blank checks from companies that received PPP loans by putting the names of fake employees in the payee line. At Azeemuddin’s direction, Malik then cashed the checks at a financial institution and then transported the cash to other members of the conspiracy. In exchange for laundering the funds, Azeemuddin received 1% to 2% of each check cashed.

Azeemuddin pleaded guilty to one count of conspiracy to commit wire fraud and one count of money laundering. He is scheduled to be sentenced and faces a maximum total penalty of 40 years in prison. Malik pleaded guilty to one count of conspiracy to commit wire fraud and money laundering. He is scheduled to be sentenced and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.”