Pakistani American Sentenced to Over 5 Years in Prison for Fraudulently Obtaining PPP Loan of $5.6 Million
- Azhar Sarwar Rana, 31, of Newton, New Jersey, used the money to pay for numerous personal expenses.
A New Jersey man was sentenced this week to 5 years, four months in prison for fraudulently obtaining a federal Paycheck Protection Program (PPP) loan of over $5 million, according to a statement from U.S. Attorney for New Jersey. Azhar Sarwar Rana, 31, of Newton, New Jersey, will also have to pay back about $5.58 million and serve five years of supervised release after completing his stint in federal prison.
The Pakistani American previously pleaded guilty to one count of bank fraud and one count of money laundering. He agreed to have submitted a fraudulent PPP loan application on behalf of his phony company, Azhar Sarwar Rana LLC., which he claimed was a real estate development company. The application falsified payroll and tax information and included internally inconsistent listings of the number of company employees.
The DOJ statement, citing New Jersey Department of Labor records, noted that Rana’s phony company paid no wages in 2019, “and the minimal wages it purportedly paid in 2020 were mostly to individuals whose submitted Social Security numbers did not correspond to their submitted names.”
Rana ended up receiving $5,677,473 in May 2020, which he then used to pay for numerous personal expenses, including investing millions in the stock market, making a payment to a luxury car dealership, and sending hundreds of thousands of dollars to accounts in Pakistan. Rana was arrested on Dec. 12, 2020, after he booked a same-day flight to Pakistan, the DOJ statement said.
As part of the CARES Act (Coronavirus Aid, Relief, and Economic Security), PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.