Member of $3M COVID-19 Loan Fraud Conspiracy Sentenced

Summary

A July 8, 2022 press release from the U.S. Attorney's Office for the Eastern District of Virginia announcing that Foad “David” Darakhshan, 47, of McLean was sentenced by U.S. District Judge Liam O’Grady to 33 months in prison for a conspiracy involving at least 63 fraudulent PPP and EIDL applications; according to court documents cited in the release, between April and December of 2020 Darakhshan conspired with Haleh Farshi, his brothers and their friends, using shell entities and falsified IRS forms coordinated in a WhatsApp chat, and 17 applications were approved for over $3 million, of which he received over $1.5 million. The release states that the government recovered over $1 million through seizure warrants and that co-defendants who pleaded guilty face sentencing between July and September. It gives the case number as 1:21-cr-267.

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ALEXANDRIA, Va. – A McLean man was sentenced today to 33 months in prison for his role in a conspiracy that involved the submission of at least 63 fraudulent loan applications to obtain COVID-19 pandemic relief funds to which he and his co-defendants were not entitled.
According to court documents, between April and December of 2020, Foad “David” Darakhshan, 47, conspired with his girlfriend, Haleh Farshi, 44, of Ashburn, and his brothers and their friends to submit falsified loan applications in order to obtain Paycheck Protection Program (PPP) loans through banks and Economic Injury Disaster Loans (EIDL) through the Small Business Administration. The defendants used multiple shell entities they controlled to apply for PPPs and EIDLs and falsified IRS tax forms submitted to lenders. They engaged in a group WhatsApp chat devoted to executing the fraud scheme, openly discussing falsifying documents and inflating the numbers of employees, company revenues, and payroll figures in order to induce lenders to make the loans.
Altogether, the defendants wrongfully obtained over $3 million in loan proceeds. They submitted at least 63 loan applications, of which 17 were approved, the remainder being denied. Foad Darakhshan received over $1.5 million of the overall proceeds of the scheme. The group used the proceeds to invest in the stock market, fund a home construction project, travel to Cancun, purchase a vehicle, and pay for other personal expenses.
The U.S. government recovered over $1 million of the total scheme proceeds through seizure warrants, and Foad Darakhshan is ordered to pay full restitution.
Haleh Farshi; Farough Darakhshan, 39, of Great Falls; Fouzi Darakhshan, 36, of Falls Church; Shoughi Darakhshan, 30, of McLean; and Marcus Gharib, 29, of Tysons, all previously pleaded guilty to their roles in the conspiracy. They are scheduled to be sentenced between July and September.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal Division; and Amaleka McCall-Brathwaite, Eastern Region Special Agent in Charge for the Small Business Administration, Office of Inspector General (SBA-OIG), made the announcement after sentencing by U.S. District Judge Liam O’Grady.
Assistant U.S. Attorney Russell L. Carlberg prosecuted the case with assistance from the Asset Recovery Unit.
A copy of this press release is located on the website of the
U.S. Attorney’s Office
for the Eastern District of Virginia. Related court documents and information are located on the website of the
District Court
for the Eastern District of Virginia or on
PACER
by searching for Case No. 1:21-cr-267.

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