Information as to Ayaz Qureshi (1) count(s) 1 — USA v. Qureshi (Dkt. 1, D. Md.)

Record facts

U.S. District Court for the District of Maryland · No. 1:22-cr-00330-RDB · Doc. 1 · 2022-09-19 · Docket on CourtListener

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Case 1:22-cr-00330-RDB Document1 Filed 09/19/22 Page 1 of 10

PAR: 2022R00371

J™M 06.24.22
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
UNITED STATES OF AMERICA *
v. # CRIMINAL NO.
AYAZ QURESHI, * (Wire Fraud Conspiracy, 18 U.S.C.
* § 1349; Forfeiture, 18 U.S.C. §
Defendant. % 18 U.S.C. § 982(a)(2)(A); 28 U.S.C.
* § 2461(c))
*
INFORMATION
COUNT ONE

(Wire Fraud Conspiracy)

Relevant Individuals, Entities, and Account(s)

The United States Attorney for the District of Maryland charges that:

At all times material to the Information:

L Defendant AYAZ QURESHI (“QURESHI”) was a resident of Severna Park,

Maryland.

2. On or about February 27, 2013, QURESHI incorporated a business with state of

Maryland called Yazee, Inc. QURESHI was the President of Yazee, Inc.

3. Yazee, Inc. maintained an account at Wells Fargo Bank, N.A. (“Wells Fargo”), a

financial institution insured by the Federal Deposit Insurance Corporation and doing business

throughout the United States, with an account number ending in 9954 (the “9954 Account”).

QURESHI and his wife S.N. were the sole signatories on this account.

4, Bank | was a federally insured financial institution headquartered in Fort Lee, New

Jersey. Bank | was an approved United States Small Business Administration (“SBA”) lender and

participated as a lender in the Paycheck Protection Program (“PPP”).

5. Co-conspirator A.S. was a resident of Baltimore, Maryland who ran a purported

financial services business.
Case 1:22-cr-00330-RDB Document1 Filed 09/19/22 Page 2 of 10

6. Payroll Processor | is a payroll processing and technology company headquartered
in Oklahoma City, Oklahoma doing business throughout the United States.

The Paycheck Protection Program

ie The SBA is an executive-branch agency of the United States government that
provides support to entrepreneurs and small businesses. The mission of the SBA is to maintain
and strengthen the nation’s economy by supporting the establishment and viability of small
businesses and by assisting in the economic recovery of communities after disasters.

8. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal
law enacted in and around March 2020, designed to provide emergency financial assistance to
Americans suffering from the economic effects caused by the COVID-19 pandemic. Two sources
of relief provided by the CARES Act were the authorization of forgivable loans to small businesses
for job retention and certain other expenses, through a program referred to as the Paycheck
Protection Program and the expansion of the Disaster Loan Program to include pandemic related
economic injury through COVID-19 Economic Injury Disaster Loans (“EIDL”).

0. To obtain a PPP loan, a qualifying business had to submit a PPP loan application
signed by an authorized representative of the business. The PPP loan application required the
business, through its authorized representative, to acknowledge the program rules and to make
affirmative certifications to be eligible for the PPP loan. For example, in the PPP loan application
(SBA Form 2483), the business, through its authorized representative, had to state its average
monthly payroll expenses and number of employees. In addition, as part of the PPP loan
application process, businesses had to provide documentation showing their payroll expenses.
These figures were used to calculate the amount of money the small business was eligible to

receive under the PPP.
Case 1:22-cr-00330-RDB Document1 Filed 09/19/22 Page 3 of 10

10. Once a qualifying business completed a PPP application, a participating lender, or
agent on behalf of the participating lender, processed the application. If a PPP loan application
was approved, the participating lender funded the PPP loan using its own monies, which the SBA
guaranteed. In the course of processing the PPP loan, the lender transmitted data from the loan
application to the SBA, including information about the borrower, the total amount of the loan,
and the identified number of employees.

Il. Proceeds from a PPP loan were legally required to be used only for certain
permissible business expenses, including payroll costs, mortgage interest, rent, and utilities. Under
the applicable PPP rules and guidance, the interest and principal on the PPP loan was eligible for
forgiveness, if the business spent the loan proceeds on permissible items within a designated period
of time and used a certain portion of the loan toward payroll expenses.

PPP Application

12. On or about March 14, 2021, A.S. submitted, or assisted with the submission of, a
PPP loan application to Bank | for Yazee, Inc. with the knowledge and consent of QURESHI.

13. Prior to submission of that application, QURESHI provided A.S. certain
documents to be included with the PPP loan application, including photographs of his Maryland
driver’s license, a voided check from the 9954 Account, and a bank statement dated February 29,
2020 for the 9954 Account.

14. The PPP loan application for Yazee, Inc. reported that Yazee, Inc. had 16
employees and an average monthly payroll of $100,289.00.

15. On or about March 21, 2021, the PPP loan application was manually or
electronically signed with QURESHI’s name as the owner of Yazee, Inc.

16. In addition, the PPP application contained the initials of QURESHI to certify each

of the following representations:
Case 1:22-cr-00330-RDB Document1 Filed 09/19/22 Page 4 of 10

a. Yazee, Inc. was in operation on February 15, 2020 and had employees for whom it
paid salaries and payroll taxes or paid independent contractors, as reported on
Form(s) 1099-MISC;
b. The funds will be used to retain workers and maintain payroll or make mortgage
payments, lease payments, and utility payments; and
c. The information provided in the application and the information provided in all
supporting documents and forms is true and accurate in all material respects.
17. The PPP loan application for Yazee, Inc. included a falsified Internal Revenue
Service (IRS) Form 940—Employer’s Annual Federal Unemployment Tax Return—for 2019, to
substantiate the amount of wages paid to purported employees of Yazee, Inc. for the 2019 tax year.
The falsified 2019 Form 940 indicated “Total payments to all employees” of $1,203,471.52.
18. In fact, during the 2019 tax year, Yazee, Inc. paid no wages to any employee.
19. Moreover, the IRS has searched its records for Yazee, Inc., and has no records of
any filed tax records for any part of 2019 or 2020 for the business.

PPP Loan Funding And Kickback Payments To A.S.

20. Based on the fraudulent and false representations and submissions made on behalf
of QURESHI as the owner of Yazee, Inc., on or about March 22, 2021, the PPP loan funded, and
approximately $250,723.00 was distributed by Bank | to the 9954 Account.

21. For his work on the PPP loan application for Yazee, Inc. A.S. expected to receive
a kickback payment of approximately 30 percent of the funded loan amount ($75,000.00) from
QURESHI.

22. After the PPP loan funded, QURESHI provided A.S. the following checks signed
by QURESHI, which were drawn on the 9954 Account, and which reflected payment to A.S. for

his work on the PPP loan application for Yazee, Inc.:
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a. Check #1019 in the amount of $15,000.00:
b. Check # 2022 in the amount of $5,000.00;
c. Check #2023 in the amount of $10,000.00;
d. Check # 2024 in the amount of $10,000.00:
e. Check #2025 in the amount of $10,000.00;
f. Check #2026 in the amount of $10,000.00;
g. Check #2027 in the amount of $10,000.00; and
h. Check #2028 in the amount of $5,000.00.
23. At the time the QURESHI provided A.S. the checks referenced in paragraph 22,
QURESHI left the payee name on each check blank.
24. Thereafter, A.S. and others known and unknown to the United States Attorney,
wrote a payee name on each of the checks, each check was ultimately deposited, and each was
ultimately drawn on the 9954 Account.

Establishment of Payroll For Purported Employees Of Yazee, Inc.

25. On or about June 22, 2021, QURESHI signed an agreement with Payroll Processor
| pursuant to which Payroll Processor | agreed to provide payroll processing services for Yazee,
Inc. and its purported employees. The agreement authorized Payroll Processor 1 to make
withdrawals from the 9954 Account for the purpose of making payments to purported employees
of Yazee, Inc. Each of these individuals had been identified by QURESHI as employees of Yazee,
Inc., but, in fact, were not employed by the business.

26. Beginning on or about July 2, 2021 and continuing through on or about December
15, 2021, Payroll Processor | made purported payroll payments from the 9954 Account via ACH
debits to QURESHI, his wife, and his other associates that purported to be employees of Yazee,

Inc.
Case 1:22-cr-00330-RDB Document1 Filed 09/19/22 Page 6 of 10

ot. In total, $144,647.21 in purported payroll payments were made to QURESHI, his
wife, and other associates from the 9954 Account, all of which consisted of funds traceable to the
PPP loan obtained by QURESHI and Yazee, Inc., his purported business.

28. Beginning in or around March 2021 and continuing through in or around December
2021, in the District of Maryland and elsewhere, the defendant,

AYAZ QURESHI,

knowingly and willfully, conspired and agreed with A.S. and others known and unknown to the
United States Attorney to commit any offense under Chapter 63 of Title 18, United States Code,
namely, to knowingly and willfully execute and attempt to execute a scheme and artifice to defraud
a financial institution, namely Bank 1, and to obtain and attempt to obtain money and property of
Bank | by means of materially false and fraudulent pretenses, representations, and promises, and
for the purpose of executing and attempting to execute the scheme to defraud, did knowingly and
willfully transmit and cause to be transmitted by means of wire communications, in interstate and
foreign commerce, writings, signs, signals, pictures, and sounds (the “scheme to defraud”), in
violation of 18 U.S.C. § 1343.

The Object of the Scheme to Defraud

29. It was the object of the conspiracy and scheme to defraud for QURESHI to
personally enrich himself by (1) fraudulently obtaining a PPP loan in the amount of more than
$250,000.00 for his own personal use and benefit, and for the personal benefit and use of his
associates; and (2) offering and paying kickbacks in return for the submission of the false and
fraudulent PPP loan application.

Manner and Means of the Scheme to Defraud

30. It was part of the conspiracy and scheme to defraud that Defendant QURESHI,

A.S., and others known and unknown to the United States Attorney, conspired to submit false
6
Case 1:22-cr-00330-RDB Document1 Filed 09/19/22 Page 7 of 10

materials, including a false PPP loan application and a false 2019 IRS Form 940, to Bank | to
obtain a PPP loan for Yazee, Inc.

31. It was a further part of the conspiracy and scheme to defraud that A.S. and others
known and unknown to the United States Attorney, fabricated a false IRS Form 940 to be
submitted with the PPP loan application for Yazee, Inc. The purpose of the false IRS Form 940
was to circumvent Bank |’s requirement that prospective borrowers submit documentation to
support the payroll figures that served as the basis for the PPP loan amount. The false IRS Form
940, which had never been filed with the IRS, was submitted in support of the PPP loan application
for Yazee, Inc.

32. It was a further part of the conspiracy and scheme to defraud that the fabricated IRS
Form 940 reflected that Yazee, Inc. paid $1,203,471.52 in wages to all employees in 2019. In fact,
in 2019 and 2020, Yazee, Inc.: (1) did not file any 2019 Form 940 with the IRS; (2) pay
unemployment tax to the IRS; or (3) withhold federal income tax for any employee.

33; It was a further part of the conspiracy and scheme to defraud that based on the
fraudulent and false representations and submissions made on behalf of QURESHI as the owner
of Yazee, Inc., on or about March 22, 2021, the PPP loan funded, and approximately $250,723.00
was distributed by Bank | to the 9954 Account belonging to Yazee, Inc.

34. It was a further part of the conspiracy and scheme to defraud that QURESHI paid
A.S. a $75,000.00 kickback, reflecting approximately 30 percent of the PPP loan amount received
by Yazee, Inc. in exchange for A.S.’s role in submitting the PPP loan application for the purported
business.

35. It was a further part of the conspiracy and scheme to defraud that QURESHI paid

A.S. this kickback by providing him a total of eight checks (referenced in paragraph 22 above),
Case 1:22-cr-00330-RDB Document1 Filed 09/19/22 Page 8 of 10

each of which was signed by QURESHI and had a dollar amount filled in, but that left the payee
blank.

36. It was a further part of the conspiracy and scheme to defraud that A.S. and others
unknown and unknown to the United States Attorney wrote a payee name on each of the checks,
each check was deposited into accounts controlled by A.S., and each was ultimately drawn on the
9954 Account.

37. It was a further part of the conspiracy and scheme to defraud that after receiving
the PPP loan for Yazee., Inc. QURESHI, with the assistance of A.S., established payroll
processing services through Payroll Processor | for the purpose of making payments to purported
employees of Yazee, Inc., including QURESHI, his wife, and other associates. The purpose of
establishing payroll services for Yazee, Inc. after receipt of the PPP loan was to facilitate the
creation of documentation that could be used to substantiate a request for the PPP loan to be
forgiven, which it was.

38. It was further part of the conspiracy and scheme to defraud that QURESHI made
no payments to Bank | in connection with PPP loan for Yazee, Inc.

39. It was a further part of the conspiracy and scheme to defraud that QURESHI, A:S..,
and others known and unknown to the United States Attorney, utilized interstate wires to submit,
assist in the submission, and communicate with each other about the submission of a PPP loan
application to Bank | and to establish payroll processing services from Payroll Processor | for
Yazee, Inc.

18 U.S.C. § 1349
Case 1:22-cr-00330-RDB Document1 Filed 09/19/22 Page 9 of 10

FORFEITURE ALLEGATION

The United States Attorney for the District of Maryland further finds that:

l. Pursuant to Federal Rule of Criminal Procedure 32.2, notice is hereby given to the
defendant that the United States will seek forfeiture as part of any sentence in accordance with 18
U.S.C. §§ 924(d), 981 (a)(1)(C), and 982(a)(2)(A), 21 U.S.C. § 853(p), and 28 U.S.C. § 2461(c),
as a result of the defendant’s conviction under the offense in Count One of this Information.

Wire Fraud Forfeiture

2. Pursuant to 18 U.S.C. § 982(a)(2)(A), the defendant’s conviction under the offense
in Count One of this Information, the defendant,

AYAZ QURESHI

shall forfeit to the United States any property constituting, or derived from, proceeds obtained

directly or indirectly, as the result of the scheme to defraud.

Substitute Assets
3: If any of the property described above, as a result of any act or omission of the
defendant:
a. cannot be located upon the exercise of due diligence;
b. has been transferred or sold to, or deposited with, a third party;
G. has been placed beyond the jurisdiction of the court;
d. has been substantially diminished in value; or
e has been commingled with other property which cannot be divided

without difficulty,

the United States shall be entitled to forfeiture of substitute property pursuant to 21 U.S.C.

§ 853(p), as incorporated by 28 U.S.C. § 2461(c).
Case 1:22-cr-00330-RDB Document 1 Filed 09/19/22 Page 10 of 10

18 U.S.C. § 924(d)

18 U.S.C. § 982(a)(2)(A)
28 U.S.C. § 2461(c)

Fed. R. Crim. P. 32.2(a)

6/27/22
Sek L. Barron %

Date
United States Attorney

10

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