A Texas man is facing federal charges for allegedly scamming the government out of $1.5 million in COVID-19 payroll grants and using it to buy a Tesla.
In an indictment unsealed on Tuesday, Fahad Shah is accused of lying about the number of employees at a seemingly defunct wedding planning company he owned in order to fraudulently collect Paycheck Protection Program (PPP) grants.
Shah spent $60,000 of the payroll grants on a Tesla, and put more than $500,000 in his E-Trade account, according to the indictment. He has been arrested and charged with wire fraud.
The Department of Justice has been cracking down on PPP fraud in the past week. The federal government initially refused to disclose a list of PPP recipients but reversed that decision this month after it was sued by a group of news outlets.
As COVID-19 shutdowns went into effect across the US, small businesses scrambled to get a share of the nearly $700 billion in Paycheck Protection Program loans provided by the federal government.
One of those small business owners was Fahad Shah of Murphy, Texas. Shah was awarded more than $1.5 million in PPP loans to cover the salaries of his 126 employees in May. But according to a federal indictment unsealed Monday, those employees didn’t exist — instead, Shah is accused of pocketing the money and using it on personal expenses, including a new $60,000 Tesla.
Shah was arrested Monday and charged with wire fraud, criminal transactions, and making false statements to a bank. He will be tried in the Eastern District of Texas and faces up to 30 years in prison if convicted. Shah is the third person to be charged with fraud related to Paycheck Protection Program loans in the Eastern District of Texas this year, US Attorney Stephen Cox said in a statement to local news paper.
“The Paycheck Protection Program is a vital tool for American small businesses and their employees who are struggling with the economic fallout from this pandemic. The Eastern District of Texas is committed to pursuing fraudsters who exploit this program to the detriment of others,” Cox said.
