Former Overland Park Business Owner Sentenced for $800,000 COVID Fraud

Summary

A June 26, 2024 press release from the U.S. Attorney's Office for the Western District of Missouri announcing that U.S. Chief District Judge Beth Phillips sentenced Mirza Michael Reazuddin, 66, a former Overland Park, Kansas man living in Lawrenceville, Georgia, to one year and six months in federal prison for receiving more than $800,000 in PPP funds for a business no longer operating. He was ordered to pay $804,100 in restitution to the SBA and to forfeit $804,100 and his Lawrenceville residence. The release states that he pleaded guilty to wire fraud and money laundering, and that Grandview Hotel, LLC, which ceased operations in 2018, received PPP loans of $384,100 in 2020 and $420,000 in 2021 on his false applications. It says he used approximately $300,000 to buy a home.

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Full text

KANSAS CITY, Mo. – A former Overland Park, Kansas, man was sentenced in federal court today for fraudulently receiving more than $800,000 under the Coronavirus Aid, Relief, and Economic Security (CARES) Act for a business that was no longer in operation.
Mirza Michael Reazuddin, 66, currently a resident of Lawrenceville, Georgia, was sentenced by U.S. Chief District Judge Beth Phillips one year and six months in federal prison without parole. The court also ordered Reazuddin to 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.
On Feb. 5, 2024, Reazuddin pleaded guilty 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 Paycheck Protection Program (PPP) authorized the Small Business Administration to provide 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.
Reazuddin used approximately $300,000 of the 2020 loan to purchase a home in Lawrenceville.
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.
This case was prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by IRS-Criminal Investigation.

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www.justice.gov