A man from Nevada has been convicted of a fraud scam involving $11.2M in COVID-19 pandemic relief funds intended to help small businesses.
The person at the heart of the fraud case, Meelad Dezfooli, was prosecuted by Trial Attorneys D. Zachary Adams and Taylor G. Stout of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorney Daniel R. Schiess for the District of Nevada.
Nevada man convicted for $11.2M COVID-19 scam
According to the court papers, Dezfooli submitted loan applications under the Paycheck Protection Program (PPP), which was established to stem the losses small business owners suffered during the pandemic.
These loans were fraudulent, the Nevada court heard and were not going to support the employee salaries that were meant to be safeguarded by the loan scheme. It was found that the fraudulent loans were submitted to “federally insured banks, purportedly for the benefit of companies that the defendant controlled, and obtained more than $11.2 million in proceeds from those loans.”
Dezfooli knowingly submitted false information, including the payroll, employee data, and use of the loan proceeds. It has also been found that the defendant used the monies to purchase “approximately 25 residences and two luxury cars, funding a personal investment account, and gambling extensively. After he was originally charged, Dezfooli continued laundering criminal proceeds by selling five of the residences that he acquired with the fraudulently obtained PPP funds.”
A jury has convicted the Nevada man of three counts of bank fraud, three counts of money laundering, and four counts of engaging in monetary transactions in criminally derived property.
He is scheduled to be sentenced on Dec. 5. He faces a maximum penalty of 30 years in prison on each of the bank fraud counts, 20 years in prison on each of the money laundering counts, and 10 years in prison on each of the counts of engaging in monetary transactions in criminally derived property.
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