Established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Paycheck Protection Program (PPP) aimed to provide financial relief to small businesses impacted by the COVID-19 pandemic, intending to bolster employee retention and sustain payroll operations. On February 12, the Department of Justice (DOJ) announced the sentencing of six individuals from Texas in connection with a scheme to fraudulently obtain over $20 million in forgivable PPP loans. 

According to the government, Hamza Abbas, Ammas Uddin, Arham Uddin, Syed Ali, Muhammad Anis, and Jesus Acosta Perez collaborated to submit false PPP loan applications, including potentially inflated employee counts and payroll expenses. These applications also allegedly included fabricated bank records and federal tax forms. Abbas was further accused of recruiting others into the scheme and generating fraudulent bank records for kickbacks.

Moreover, the individuals were alleged to have laundered a portion of the illicitly obtained funds by issuing checks from PPP loan recipient companies to individuals who may not have been legitimate employees. These checks were purportedly cashed at various check-cashing businesses, including one owned by another co-conspirator. All six individuals previously pleaded guilty to the related charges and were handed down sentences ranging from one year and one day to three years and eight months. 

This sentencing adds to earlier convictions tied to the same scheme. In January, three additional individuals were sentenced, while in October 2023, seven individuals, including the alleged ringleader Amir Aqeel, received sentences for their purported roles in the conspiracy, with Aqeel receiving a 15-year prison term.

The Fraud Section of the Department of Justice leads the Criminal Division’s prosecution of schemes exploiting the PPP. Since the enactment of the CARES Act, the Fraud Section has prosecuted over 200 defendants in more than 130 criminal cases, seizing over $78 million in cash proceeds derived from fraudulently obtained PPP funds, along with numerous real estate properties and luxury items purchased with such proceeds.

At Chilivis Grubman, our attorneys represent clients of all sizes and types in white-collar criminal investigations and PPP-related matters. If you require assistance in such a matter, please contact us today.