HOUSTON (Covering Katy News) - A federal jury convicted a Richmond man for his role in a scheme to fraudulently obtain and launder millions of dollars in forgivable Paycheck Protection Program (PPP) loans the Small Business Administration (SBA) guarantees under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
According to court documents and evidence presented at trial, Abdul Fatani, 57, of Richmond, conspired with others to submit fraudulent PPP loan applications by falsifying the number of employees and the average monthly payroll expenses of the applicant businesses.
The co-conspirators sought over $35 million through more than 80 fraudulent PPP loans.
Federal Prosecutors say Fatani distributed more than $500,000 in fraudulent loan proceeds to his co-conspirators and himself using bogus payroll checks and laundered a portion of the proceeds by transferring the funds from one of his bank accounts to another bank account he controlled.
“Fatani’s pilfering of the PPP fund defrauded the government of funds that were supposed to help people with real businesses, suffering real losses and facing real struggles,” said U.S. Attorney Alamdar S. Hamdani. “This man, instead, had no business and no employees. Just a scheme to defraud. Today’s jury’s verdict shows that his fraudulent actions are unacceptable and will not be tolerated in this district.”
Fatani was convicted of one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of unlawful monetary transactions - money laundering.
He is scheduled to be sentenced on May 8 and faces a maximum penalty of 20 years for conspiracy and wire fraud and ten years for money laundering.
In addition, 15 other individuals have pleaded guilty to their involvement in the loan fraud scheme.