Supperseding Indictment as to Ayaz Qureshi (1) count(s) 1s, 2s-3s — USA v. Qureshi (Dkt. 42, D. Md.)

Record facts

U.S. District Court for the District of Maryland · No. 1:22-cr-00330-JKB · Doc. 42 · 2023-12-19 · Docket on CourtListener

Full text

Case 1:22-cr-00330-JKB Document 42 Filed 12/19/23 Page 1 of 10

PAR/BAM: 2022R00371

hmg.12.18.23
JSOC- BALTIMORE
‘23 DEC 19 pad 16 IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
UNITED STATES OF AMERICA "
v. CRIMINAL NO. Q D® -22 330
AYAZ QURESHI, * (Wire Fraud Conspiracy, 18 U.S.C.
* § 1349; Wire Fraud, 18 U.S.C. §
Defendant. sd 1343; Aiding and Abetting, 18
* U.S.C. § 2; Forfeiture, 18 U.S.C. §
*

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

SUPERSEDING INDICTMENT

COUNT ONE
(Wire Fraud Conspiracy)

Relevant Individuals, Entities, and Account(s)

The Grand Jury for the District of Maryland charges that:

At times material to the Indictment:

1. Defendant AYAZ QURESHI (“QURESHI”) was a resident of Severna Park,
Maryland.

2. On or about February 27, 2013, QURESHI incorporated a Maryland business
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 were the sole signatories on this account.

4. Cross River Bank (“Cross River”) was a federally insured financial institution
headquartered in Fort Lee, New Jersey. Cross River was an approved United States Small
Business Administration (“SBA”) lender and participated as a lender in the Paycheck Protection

Program (“PPP”).
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5. Co-conspirator A.S. was a resident of Baltimore, Maryland who ran a purported
financial services business.

6. Payroll Processor 1 was a payroll processing and technology company
headquartered in Oklahoma City, Oklahoma doing business throughout the United States.

7. The Internal Revenue Service (“IRS”) was a bureau of the United States Treasury
charged with, among other things, ensuring that taxpayers meet their tax obligations under the law.

The Paycheck Protection Program

8. The SBA was an executive-branch agency of the United States government that
provides support to entrepreneurs and small businesses. The mission of the SBA was 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.

9. 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”).

10. 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
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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.

11. 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.

12. 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.

The Scheme to Defraud

13. Beginning in or about March 2021 and continuing through in or about December

2021, in the District of Maryland and elsewhere, the defendant,
AYAZ QURESHI,

did knowingly devise and intend to devise a scheme and artifice to defraud the defraud a financial
institution, namely Cross River, and the United States, to obtain and attempt to obtain money and
property of Cross River by means of materially false and fraudulent pretenses, representations, and
promises, that is, the defendant knowingly submitted and caused to be submitted false information
to Cross River for PPP funds and the defendant gave A.S. a share of the PPP payouts in the form

of kickbacks (hereinafter “the scheme to defraud”).

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The Conspiracy and Scheme To Defraud

14. Beginning in or about March 2021 and continuing through in or about December
2021, in the District of Maryland and elsewhere, the defendant,
AYAZ QURESHI,
did knowingly and willfully conspire, combine, confederate, and agree with A.S. and others known
and unknown to the Grand Jury, to commit wire fraud affecting a financial institution, that is, to
knowingly execute and attempt to execute the scheme to defraud through the use of interstate
wires, in violation of Title 18, United States Code, Sections 1343 (hereinafter, the “conspiracy”’).

The Object of the Conspiracy and Scheme to Defraud

15. 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 a false and
fraudulent PPP loan application.

Manner and Means of the Scheme to Defraud

16. It was part of the conspiracy and scheme to defraud that Defendant QURESHI,
A.S., and others known and unknown to the Grand Jury, submitted and caused the submission of
false information, including a false PPP loan application and a false 2019 IRS Form 940 that had
never been submitted to the IRS, to Cross River to obtain a PPP loan for Yazee, Inc.

V7. It was further part of the conspiracy and scheme to defraud that QURESHI
provided A.S. with certain documents to be submitted with the Cross River PPP loan application,
including photographs of QURESHI’s Maryland driver’s license, a voided check from

QURESHI’s 9954 Account, and a 9954 Account statement dated February 29, 2020.

Case 1:22-cr-00330-JKB Document 42 Filed 12/19/23 Page 5 of 10

18. It was further part of the conspiracy and scheme to defraud that QURESHI caused
the PPP application to falsely report and certified the following information:

a. Yazee, Inc. had 16 employees and an average monthly payroll of $100,289.00;

b. 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;

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;
and

d. The requested PPP funds would be used to retain workers and maintain payroll or
make mortgage payments, lease payments, and utility payments.

19. It was further part of the conspiracy and scheme to defraud that A.S., and others
fabricated a false IRS Form 940 to be submitted with the PPP loan application for Yazee, Inc.,
which among other things, falsely claimed total payments to all employees of $1,203,471.52. 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. The purpose
of the false IRS Form 940 was to circumvent Cross River’s requirement that prospective borrowers
submit documentation to support the payroll figures that served as the basis for the PPP loan
amount.

20. It was 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 Cross River to the 9954 Account belonging to Yazee, Inc. and controlled by

QURESHI.
Case 1:22-cr-00330-JKB Document 42 Filed 12/19/23 Page 6 of 10

21. It was further part of the conspiracy and scheme to defraud that QURESHI paid
A.S. a $75,000 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.

22. It was further part of the conspiracy and scheme to defraud that QURESHI paid
A.S. this kickback by providing him the eight checks listed below, each of which was signed by
QURESHI and had a dollar amount filled in, but that left the payee blank:

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. It was further part of the conspiracy and scheme to defraud that A.S. and others
unknown and unknown to the Grand Jury 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.

24. It was a further part of the conspiracy and scheme to defraud that after receiving
the Cross River PPP loan for Yazee., Inc., QURESHI and A.S., established and sought to establish

payroll processing services through Payroll Processor 1 to purported employees of Yazee, Inc.

Case 1:22-cr-00330-JKB Document 42 Filed 12/19/23 Page 7 of 10

25. It was a further part of the conspiracy and scheme to defraud that on forms
submitted to Payroll Processor 1, QURESHI listed multiple individuals as employees of Yazee
Inc. who were never in fact employees of the business.

26. It wasa further part of the conspiracy and scheme to defraud that QURESHI used
the payroll processing services as a method of funneling funds traceable to the PPP loan to
QURESHL his wife, and others.

27. It was further part of the conspiracy and scheme to defraud that QURESHI, AS.,
and others known and unknown to the Grand Jury, used interstate wires to submit, assist in the
submission, and communicate with each other about the submission of a PPP loan application to

Cross River and to establish payroll processing services from Payroll Processor 1 for Yazee, Inc.

18 U.S.C. § 1349

Case 1:22-cr-00330-JKB Document 42 Filed 12/19/23 Page 8 of 10

COUNTS TWO AND THREE
(Wire Fraud)

The Grand Jury for the District of Maryland further charges that:

1. Paragraphs 1 — 13 and 14 — 27 of Count One of this Indictment are incorporated
here.
2. On or about the dates set forth below, in the District of Maryland, the Defendant
AYAZ QURESHI,

for the purpose of executing and attempting to execute the scheme to defraud, did knowingly
transmit and cause to be transmitted in interstate commerce by means of a wire communication,

certain signals, signs and sounds, as set forth below:

COUNT DATE DESCRIPTION INTERSTATE WIRE
COMMUNICATION DETAILS
Z March 14, 2021 | Submission of PPP loan From Maryland to a location
application for Yazee outside of Maryland
3 March 22, 2021 | ACH transfer of From a location outside of
$250,723.00 from Cross Maryland to Maryland
River to the 9954 Account

18 U.S.C. § 1343
18 U.S.C. §2

Case 1:22-cr-00330-JKB Document 42 Filed 12/19/23 Page 9 of 10

FORFEITURE ALLEGATION

The Grand Jury for the District of Maryland further finds that:

1. 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,
982(a)(1) and (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 Counts One through Three of this Indictment.

Wire Fraud Forfeiture

2. Pursuant to 18 U.S.C. § 982(a)(2)(A), the defendant’s conviction under any of the
offenses in Counts One through Three of this Indictment, 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;
c. 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).

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Case 1:22-cr-00330-JKB Document 42 Filed 12/19/23 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)

Erek L. Barron
United States Attorney

A TRUE BILL

SIGNATURE REDACTED

Foreperson

\AHIGI2A

Date

10

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