June 11, 2021

Caity Roach
Editor

Fraud Friday –Texas Wedding Planner Uses PPP Proceeds to Purchase Teslas and Trucks

“PPP loans were intended to help businesses keep themselves and their employees afloat during the COVID-19 pandemic,” says acting U.S. Attorney, Nicholas J. Ganjei.  “PPP loans were not, and never were, intended to serve as personal loans for personal use. By applying and qualifying for PPP funds on fraudulent grounds, Fahad Shah took advantage of the COVID-19 economic crisis to enrich himself and his family.”

Last month, Fahad Shah admitted to fraudulently obtaining over $1.5 million in PPP loan proceeds to pay off his home mortgage, purchase securities through his personal investment account, and buy two Teslas, two Freightliner trucks, and a Mercedes Benz van.

According to court documents, Shah attempted to obtain over $3 million in PPP loans from two different SBA-approved lenders. On the application to one lender, Shah fraudulently claimed that his wedding planning company employed 126 individuals and that his average monthly payroll expenses exceeded $700,000. When that application was denied, Shah submitted an application to a different lender which falsely stated that his company had 126 employees and over $600,000 in monthly payroll expenses. In reality, Shah’s wedding planning business only employed two individuals.

In connection with both PPP loan applications, Shah submitted fake quarterly federal tax return documents and payroll records. Based on the information presented on the loan application and its supporting documentation, one of the institutions approved a loan for approximately $1.5 million dollars.

Shah was indicted by a federal grand jury on June 18, 2020, and pleaded guilty to wire fraud on May 19, 2021. Under federal statutes, Shah could face up to 20 years in federal prison. A formal sentencing hearing will be scheduled after the completion of an investigation which is being led by the U.S. Probation Office.

Sources:
Department of Justice