LOS ANGELES—An Orange County man was sentenced Feb. 17 to 4 1/2 years in federal prison for fraudulently obtaining $5 million in COVID-relief loans for his sham businesses, then used the money on himself, including purchasing Ferrari, Bentley, and Lamborghini cars.
Mustafa Qadiri, 42, of Irvine, was sentenced by U.S. District Judge Josephine L. Staton, who also fined him $20,000 and ordered him to pay $2.86 million in restitution, according to the U.S. Attorney’s Office.
Qadiri pleaded guilty in July 2021 to one count each of bank fraud, aggravated identity theft, and money laundering.
According to court documents, he claimed to have operated four Newport Beach-based companies, none of which were in operation: All American Lending Inc., All American Capital Holdings Inc., RadMediaLab Inc., and Ad Blot Inc.
In May and June of 2020, he submitted false and fraudulent Paycheck Protection Program loan applications to three banks on behalf of those companies.
The false information he submitted included the number of employees to whom the companies paid wages, altered bank account records with inflated balances, and fictitious quarterly federal tax return forms. Qadiri also used someone else’s name, Social Security number, and signature to fraudulently apply for one of the loans.
The Paycheck Protection Program loans were intended by Congress to provide financial support to businesses suffering under the weight of the COVID-19 pandemic’s economic fallout.
Relying on this false information, the banks funded the loan applications and transferred $5 million to accounts Qadiri controlled. Qadiri used the fraudulently obtained loans for his own personal benefit—including for expenses prohibited under the requirements of the relief program—such as the purchase of luxury vehicles, lavish vacations, and the payment of his personal expenses, papers filed in Los Angeles federal court show.
Federal agents seized the Ferrari, Bentley, and Lamborghini cars that Qadiri purchased with the fraudulently obtained loans, along with $2 million in ill-gotten gains from his bank account, prosecutors said.
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