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Azhar Sarwar Rana, 30, of Newton, used the money -- designed to keep struggling small businesses afloat during the pandemic – to millions in the stock market, make a payment to a luxury car dealership and send hundreds of thousands of dollars to accounts in Pakistan, Acting U.S. Attorney Rachael A. Honig said.
Rana submitted an application for a stimulus loan under the federal Paycheck Protection Program for a company that purportedly invested in real estate development, Honig said.
The application included bogus payroll and tax information and included “internally inconsistent listings of the number of company employees.,” the U.S. attorney said.
New Jersey Department of Labor records showed that Rana’s company, incorporated in his name, paid no wages in 2019, she said.
The minimal wages it purportedly paid in 2020 “were mostly to individuals whose submitted Social Security numbers did not correspond to their submitted names,” Honig said.
“Based on Rana’s alleged misrepresentations, the 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 meant for distressed small businesses,” she said.
Rana took a deal from the government rather than face trial, pleading guilty in U.S. District Court in Newark to bank fraud and money laundering.
U.S. District Judge Esther Salas scheduled sentencing for Nov. 3.
Honig credited special agents of the FBI, IRS – Criminal Investigation, the Social Security Administration and the U.S. Department of Homeland Security’s Homeland Security Investigations with the investigation that led to Rana’s plea and sentencing, secured by Assistant U.S. Attorney Jennifer S. Kozar of her Economic Crimes Unit in Newark.
Rana was among dozens of people charged by the U.S. Justice Department with trying to steal more than $175 million from the taxpayer-funded PPP, which was designed to keep struggling small businesses afloat during the pandemic.
Several hundred more investigations -- involving nearly 500 suspects and hundreds of millions in loans – were continuing, federal authorities said.
Congress last year established the $670 billion rescue fund through the CARES Act, which was “designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic,” Honig said.
The program distributed an estimated $525 billion in forgivable loans to more than five million companies, saving an estimated 50 million jobs during one of the worst national crises in recent history.
Tens of thousands of those recipients, it turns out, weren’t eligible, federal authorities said.
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