A federal jury convicted a Texas man today for his role 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 (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. In total, the co-conspirators sought over $35 million through more than 80 fraudulent PPP loans. Fatani distributed over $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 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 in prison for conspiracy and wire fraud and 10 years in prison for money laundering. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
In addition, 15 other individuals have pleaded guilty to their involvement in the loan fraud scheme.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas; Inspector General Hannibal “Mike” Ware of the SBA Office of Inspector General (SBA-OIG); Special Agent in Charge Catherine Huber of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Mark B. Dawson of Homeland Security Investigations (HSI) Houston Field Office; Acting Inspector General Tyler Smith of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG); and Inspector General J. Russell George of the Treasury Inspector General for Tax Administration (TIGTA) made the announcement.
The SBA-OIG, FHFA-OIG, HSI, FDIC-OIG, and TIGTA investigated the case.
Trial Attorneys Kate McCarthy, Spencer Ryan, Della Sentilles, and Louis Manzo of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Rodolfo Ramirez for the Southern District of Texas are prosecuting the case.