Man Sentenced for CARES Act FraudMan Sentenced for CARES Act Fraud Mirza Michael Reazuddin, formerly of Overland Park, Kansas, has been convicted in federal court for fraudulently receiving over $800,000 from the Coronavirus Aid, Relief and Economic Security Act (CARES). Reazuddin, now residing in Lawrenceville, Georgia, received the funds for a business that had ceased operations. He obtained a $384,100 PPP loan in 2020 and a $420,000 loan in 2021, using the proceeds to purchase a house in Lawrenceville. U.S. Chief District Judge Beth Phillips sentenced Reazuddin to one year and six months in prison without parole. He was also ordered to pay $804,100 in restitution to the Small Business Administration and forfeit the same amount to the government. Reazuddin pleaded guilty to bank fraud and money laundering charges. The CARES Act, which provided emergency funding during the COVID-19 pandemic, authorized the Paycheck Protection Program to make forgivable loans to businesses. Reazuddin obtained the loans by making false statements and submitting fraudulent documents.
KANSAS CITY, Mo. – A man formerly of Overland Park, Kansas, was convicted in federal court on Wednesday of fraudulently receiving more than $800,000 from the Coronavirus Aid, Relief and Economic Security Act (CARES).
According to court documents, Mirza Michael Reazuddin, 66, received the money for a business that was no longer in business. Reazuddin, currently of Lawrenceville, Georgia, was sentenced by U.S. Chief District Judge Beth Phillips to one year and six months in prison without parole. The court also ordered Reazuddin to pay $804,100 in restitution to the Small Business Administration and to forfeit $804,100 to the government, representing proceeds he obtained from the fraud and his Lawrenceville home.
Reazuddin pleaded guilty on February 5, 2024 to one count of bank fraud and one count of money laundering.
Reazuddin was a partner in the Grandview Hotel, LLC hotel operation. The operation was founded in 2013 and ceased operations in 2018. Another company subsequently took over the hotel’s operations until it was finally closed in 2021.
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According to court documents, Reazuddin applied for and received a $384,100 PPP loan on June 25, 2020, on behalf of the Grandview Hotel, which had ceased operations. Reazuddin made false statements on the application and submitted fraudulent documents in support of the application. Reazuddin used approximately $300,000 of this loan to purchase his house in Lawrenceville.
On January 26, 2021, Reazuddin applied for and received a second PPP loan of $420,000 on behalf of Grandview Hotel. Reazuddin again made false statements and provided fraudulent documents to receive the loan.
The CARES Act was introduced to provide emergency funding due to the economic impact of COVID-19. The Paycheck Protection Program, PPP, authorized the Small Business Administration to make forgivable loans to businesses to retain employees and maintain payroll, mortgage interest payments, lease payments, and utilities. Under the PPP, both the principal and interest on these loans were eligible for forgiveness.
