Azhar Rana — Criminal Complaint, Mag. No. 20-12468

Summary

A criminal complaint in United States v. Azhar Rana, Mag. No. 20-12468, in the U.S. District Court for the District of New Jersey before United States Magistrate Judge James B. Clark III, sworn by FBI Special Agent Dustin Doyle by telephone on December 14, 2020. Count One charges bank fraud under Title 18, United States Code, Section 1344(2) and Section 2 over an April 2020 PPP application on behalf of Azhar Sarwar Rana LLC to Lender 1 for approximately $5,677,473. Count Two charges money laundering over the transfer of approximately $1 million from a Lender 1 account to Bank 3 on or about May 7, 2020. The affidavit states that state wage records show payments only around June 2020, of approximately $30,000 collectively.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

                     UNITED STATES DISTRICT COURT
                        DISTRICT OF NEW JERSEY


UNITED STATES OF AMERICA                         Hon. James B. Clark III

            V.                                   Mag. No. 20-12468

AZHAR RANA                                       CRIMINAL COMPLAINT



      I, Special Agent Dustin Doyle, being duly sworn, state that the following is
true and correct to the best of my knowledge and belief:

                             SEE ATTACHMENT A

      I further state that I am a Special Agent with the Federal Bureau of
Investigation, and that this complaint is based on the following facts:

                             SEE ATTACHMENT B

continued on the attached pages and made a part hereof.



                        Special Agent Dustin Doyle
                        Federal Bureau of Investigation


Special Agent Dustin Doyle attested to this Complaint by telephone pursuant
to Federal Rule of Criminal Procedure 4. l(b)(2)(A) on December 14, 2020 in
New Jersey.



HONORABLE JAMES B. CLARK III
UNITED STATES MAGISTRATE JUDGE
                                ATTACHMENT A

                                    Count One
                                   (Bank Fraud)

      In or around April 2020, in Sussex County, in the District of New Jersey
and elsewhere, defendant

                                   AZHAR RANA

did knowingly and intentionally execute and attempt to execute a scheme and
artifice to obtain moneys, funds, and credits owned by and under the custody
and control of financial institutions, to wit: Lender 1, the deposits of which are
insured by the Federal Deposit Insurance Corporation, by means of materially
false and fraudulent pretenses, representations, and promises:

             Approximate                          Description
     Count
                Date
                             The submission of an application on behalf of Azhar Sarwar
              April 2020
       1                     Rana LLC to Lender 1 for approximately $5,677,473 in PPP
                             funds.

       In violation of Title 18, United States Code, Section 1344(2) and Section
2.
                                   Count Two
                               (Money Laundering)

      On or about May 7, 2020, in Sussex County, in the District of New Jersey
and elsewhere, defendant

                                   AZHAR RANA

did knowingly engage and attempt to engage in a monetary transaction by,
through, and to a financial institution, affecting interstate and foreign commerce,
in criminally derived property of a greater value than $10,000, that is, the
transfer of approximately $1 million of U.S. currency from an account at Lender
1 to Bank 3 8184 Account, such property having been derived from a specified
unlawful activity, that is, bank fraud, in violation of Title 18, United States Code,
Section 1344.

      In violation of Title 18, United States Code, Section 1957 and Section 2.
                                 ATTACHMENT B

       I, Dustin Doyle, am a Special Agent with the Federal Bureau of
Investigation. I am fully familiar with the facts set forth herein based on my own
investigation, my conversations with other law enforcement officers, and my
review of reports, documents, and evidence. Where statements of others are
related herein, they are related in substance and part. Because this complaint
is being submitted for a limited purpose, I have not set forth each and every fact
that I know concerning this investigation. Where I assert that an event took
place on a particular date, I am asserting that it took place on or about the date
alleged.

                                     Overview

      1. Defendant RANA used a variety of false statements to fraudulently
obtain over $5 million in federal COVID-19 emergency relief funds meant for
distressed small businesses. RANA submitted, or caused to be submitted, an
application to a bank that falsified payroll and tax information. He then
laundered the loan proceeds through a number of accounts he controlled,
ultimately using the stolen funds to invest in the stock market, send money
abroad to Pakistan, and make payment to a luxury car dealership, among other
things.

                                   Background

The Paycheck Protection Program

      2. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is
a federal law enacted in or around March 2020 and designed to provide
emergency financial assistance to the millions of Americans who are suffering
the economic effects caused by the COVID-19 pandemic. One source of relief
provided by the CARES Act was the authorization of up to $349 billion in
forgivable loans to small businesses for job retention and certain other expenses,
through a program referred to as the Paycheck Protection Program (“PPP”). In or
around April 2020, Congress authorized over $300 billion in additional PPP
funding.

       3. In order to obtain a PPP loan, a qualifying business must submit a
PPP loan application, which is signed by an authorized representative of the
business.    The PPP loan application requires the business (through its
authorized representative) to acknowledge the program rules and make certain
affirmative certifications in order to be eligible to obtain the PPP loan. In the PPP
loan application, the small business (through its authorized representative) must
state, among other things, its: (a) average monthly payroll expenses; and (b)
number of employees. These figures are used to calculate the amount of money
the small business is eligible to receive under the PPP. In addition, businesses
applying for a PPP loan must provide documentation showing their payroll
expenses.

       4. A PPP loan application must be processed by a participating lender.
If a PPP loan application is approved, the participating lender funds the PPP loan
using its own monies, which are 100% guaranteed by Small Business
Administration (“SBA”). Data from the application, including information about
the borrower, the total amount of the loan, and the listed number of employees,
is transmitted by the lender to the SBA in the course of processing the loan.

       5. PPP loan proceeds must be used by the business on certain
permissible expenses—payroll costs, interest on mortgages, rent, and utilities.
The PPP allows the interest and principal on the PPP loan to be entirely forgiven
if the business spends the loan proceeds on these expense items within a
designated period of time after receiving the proceeds and uses a certain amount
of the PPP loan proceeds on payroll expenses.

Relevant Entities and Individuals

        6.   At various times relevant to this complaint:

     a.    Defendant Azhar Sarwar Rana (“RANA”) was a resident of Newton,
New Jersey. From in or around May 2017 through in or around June 2020,
RANA worked at Bank 1, including as an internal audit specialist.

      b.     RANA was associated with a corporate entity called Azhar Sarwar
Rana LLC (“Rana LLC”) that listed the same address as RANA’s residence in
Newton, New Jersey (the “Newton Address”). Rana LLC was formed in the State
of New Jersey on or about July 10, 2019. The certificate of formation for Rana
LLC listed RANA as the registered agent and one of two members (the other
believed to be RANA’s family member), and stated that the business purpose of
Rana LLC was “to buy, sell and invest in real estate properties for profit.”

      c.   Lender 1 was a financial institution insured by the Federal Deposit
Insurance Corporation (“FDIC”) headquartered in Charlotte, North Carolina.

     d.       Bank 2 was a financial institution headquartered in Omaha,
Nebraska.

      e.    Bank 3 was a financial institution headquartered in San Francisco,
California.

        f.    Bank 4 was a financial institution headquartered in New York, New
York.
                             The Scheme to Defraud

False PPP Application to Lender 1

      7. In or around early April 2020, a PPP loan application was submitted
to Lender 1 on behalf of Rana LLC (the “Application”). The Application listed
Rana LLC’s average monthly payroll as $722,352 and the number of employees
as 11. As part of the Application, RANA electronically signed an addendum that
listed a different number for Rana LLC’s average monthly payroll—
$1,390,167.28—and requested a $10,000,000 PPP loan.

      8.    The Application also included, among other things:

           a. A payroll report for the first quarter of 2020 that listed Rana LLC’s
              business address as the Newton Address and an approximate
              payroll expense for the three months of $3,430,872.

           b. An employer’s quarterly federal tax return form 941 (the “Form 941”)
              for the fourth quarter of 2019 that listed 76 employees earning
              compensation in 2019, $925,061.57 in wages paid, and
              $117,769.428 in taxable social security wages. The Form 941 also
              listed Rana LLC’s address as the Newton Address.

      9. The Application contained false statements. According to Social
Security Administration (“SSA”) records, Rana LLC did not process any SSA
wages in 2018 or 2019, indicating that the Form 941 entry regarding taxable
social security wages was false. Additionally, the Application was internally
inconsistent as to the amount of payroll expense and employees, indicating that
those entries were false as well.

      10. According to New Jersey Department of Labor (“NJDOL”) records,
since 2019, Rana LLC paid wages in New Jersey only to approximately ten
purported employees (including RANA and a family member), which occurred
only during in or around June 2020, and only in the amount of approximately
$30,000 collectively.

      11. According to SSA records, the social security numbers and
corresponding names for approximately eight of the purported employees
submitted by Rana LLC to NJDOL (other than RANA and a family member) did
not match—the social security numbers either belonged to other individuals or
were fake. Those eight names submitted to NJDOL as purported employees of
Rana LLC were the names of employees at Bank 1, where RANA previously
worked.
      12. Based on the Application, on or about May 6, 2020, RANA executed
a promissory note with Lender 1 and Rana LLC received the $5,677,473 PPP loan
in an account at Lender 1 in the name of Rana LLC and controlled by RANA.

Use of the PPP Loan Proceeds

      13. Bank records showed that RANA quickly transferred the PPP loan
money to a number of accounts he controlled. RANA transferred approximately
$4 million to an account in RANA’s name at Bank 3 ending in number 8184
(“Bank 3 8184 Account”), including an approximately $1 million transfer on or
about May 7, 2020. From there, RANA eventually sent a large portion of the
proceeds to a brokerage account in RANA’s name at Bank 2 (the “Bank 2
Brokerage Account”). RANA used the PPP funds in the Bank 2 Brokerage
Account to trade millions of dollars in securities.

      14. RANA opened the Brokerage Account in or around April 2017,
presenting his permanent resident card, social security card, and New Jersey
driver’s license as identification.

     15. On or about May 8, 2020, the day after RANA transferred
approximately $1 million in PPP to the Bank 3 8184 Account, surveillance
photographs showed him depositing a tax refund check in his name in that same
account.

      16. RANA ultimately transferred approximately $450,000 from the PPP
loan proceeds to an account in Pakistan.

      17. RANA also transferred approximately $200,000 from the PPP loan
proceeds to an account in his name at Bank 4 ending in 2339 (the “Bank 4 2339
Account”) in two transactions on or about May 21, 2020 and May 22, 2020. Prior
to the transfers, the account had a balance of approximately $3,000. RANA
previously opened the Bank 4 2339 Account on or about May 15, 2020. On or
about May 28, 2020, RANA used approximately $13,000 of the PPP loan proceeds
from the Bank 4 2339 Account to make a payment to a BMW car dealership in
Roxbury, New Jersey.

                                   Arrest

      18. On or about December 12, 2020, after RANA booked a flight to
Pakistan departing that same day, federal law enforcement arrested RANA for
his conduct in this scheme. Law enforcement encountered RANA outside the
Newton Address, and he later spontaneously stated, in sum and substance, that
he thought he would be confronted by law enforcement at the airport.


File and source

File

dl_636bb0c680e336f5.pdf

Size

150,124 bytes

SHA-256

bc47d613550f864417696cd8d7dacc8e82450b262e2d6c72cea423d420c6d672

Our copy

dl_636bb0c680e336f5.pdf

Original

www.justice.gov