Former Overland Park Business Owner Pleads Guilty to $800,000 COVID Fraud

Summary

A release published 2024-02-05 states that Mirza Michael Reazuddin pleaded guilty in federal court to one count of wire fraud and one count of money laundering over more than $800,000 received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It states that on June 25, 2020, Reazuddin applied for and received a $384,100 Paycheck Protection Program loan on behalf of Grandview Hotel, LLC, and that on Jan. 26, 2021, a second draw of $420,000, making false statements on both applications. Under the plea agreement, Reazuddin must pay $804,100 in restitution to the Small Business Administration and forfeit $804,100 and a residential property. The release states that the maximum sentence is up to 30 years in federal prison without parole and that the sentence will be determined by the court.

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Full text

KANSAS CITY, Mo. – A former Overland Park, Kansas, man pleaded guilty in federal court today to charges related to fraudulently receiving more than $800,000 under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Mirza Michael Reazuddin, 66, currently a resident of Lawrenceville, Georgia, pleaded guilty before U.S. Chief District Judge Beth Phillips to one count of wire fraud and one count of money laundering.
Reazuddin was a partner in a hotel operation called Grandview Hotel, LLC, which was established in 2013 and ceased operations in 2018. Another company then took over operations of the hotel until it ultimately closed in 2021.
The purpose of the CARES Act was to provide emergency financial assistance due to the economic impact caused by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration to provide low-interest Economic Injury Disaster Loans to eligible small businesses that experienced substantial financial disruption due to the economic impact of the COVID-19 pandemic. Additionally, the Paycheck Protection Program (PPP) authorized forgivable loans to small businesses to retain workers and maintain payroll, and make mortgage interest payments, lease payments, and utility payments. Under the PPP, both the principal and interest on those loans were eligible for forgiveness.
On June 25, 2020, Reazuddin, on behalf of Grandview Hotel (which had ceased operations), applied for and received a PPP loan in the amount of $384,100. Reazuddin made numerous false statements on the application and submitted false and fraudulent documents in support of the application.
On Jan. 26, 2021, Reazuddin, on behalf of Grandview Hotel, applied for and received a second draw of PPP funding in the amount of $420,000. Reazuddin made similar false statements on this application.
Under the terms of today’s plea agreement, Reazuddin must pay $804,100 in restitution to the Small Business Administration and forfeit to the government $804,100, which represents the proceeds he personally obtained from the scheme, as well as his residential property in Lawrenceville.
Under federal statutes, Reazuddin is subject to a sentence of up to 30 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by IRS-Criminal Investigation.

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www.justice.gov