Indictment — United States v. Mustafa Qadiri, Central District of California (Document 1)

Summary

A grand jury Indictment filed May 5, 2021 as Document 1 in United States v. Mustafa Qadiri, No. 8:21-cr-00081-JLS, in the U.S. District Court for the Central District of California. It alleges that the defendant submitted false PPP loan applications in May and June 2020 on behalf of All American Lending, Inc., All American Capital Holdings, Inc., RadMediaLab, Inc. and Ad Blot, Inc., inflating employee counts and providing altered bank records and fictitious Forms 941. According to the indictment, the lenders transferred approximately $5 million in loan proceeds, used in part to buy luxury vehicles. It charges bank fraud under 18 U.S.C. § 1344(2), wire fraud, aggravated identity theft under 18 U.S.C. § 1028A(a)(1) and money laundering under 18 U.S.C. § 1957, and seeks forfeiture of a 2011 Ferrari 458 Italia and a 2018 Lamborghini Aventador S.

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      Case 8:21-cr-00081-JLS Document 1 Filed 05/05/21 Page 1 of 14 Page ID #:1



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                                                                5/5/2021
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 8                       UNITED STATES DISTRICT COURT

 9                 FOR THE CENTRAL DISTRICT OF CALIFORNIA

10                              SOUTHERN DIVISION

11                            April 2021 Grand Jury

12   UNITED STATES OF AMERICA,             No. 8:21-cr-00081-JLS

13             Plaintiff,                  I N D I C T M E N T

14                  v.                     [18 U.S.C. § 1344(2): Bank
                                           Fraud; 18 U.S.C. 1343: Wire
15   MUSTAFA QADIRI,                       Fraud; 18 U.S.C. § 1028A(a)(1):
                                           Aggravated Identity Theft; 18
16             Defendant.                  U.S.C. § 1957: Money Laundering;
                                           18 U.S.C. § 982: Criminal
17                                         Forfeiture]
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21        The Grand Jury charges:
22                          COUNTS ONE THROUGH FOUR
23                       [18 U.S.C. §§ 1344(2), 2(b)]
24   A.   INTRODUCTORY ALLEGATIONS
25        1.   At times relevant to this Indictment:
26        Defendant QADIRI and the QADIRI-Controlled Entities
27        2.   Defendant MUSTAFA QADIRI was a resident of Irvine,
28   California.
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 1        3.     Defendant QADIRI operated purported mortgage

 2   businesses All American Lending, Inc. (“AAL”) and All American

 3   Capital Holdings, Inc. (“AACH”) and purported advertising

 4   businesses RadMediaLab, Inc. (“RadMedia”) and Ad Blot, Inc. (“Ad

 5   Blot”) (collectively the “QADIRI-Controlled Entities”), all

 6   located in Newport Beach, California.

 7        The Paycheck Protection Program

 8        4.     The Coronavirus Aid, Relief, and Economic Security
 9   (“CARES”) Act was a federal law enacted in or about March 2020
10   that was designed to provide emergency financial assistance to
11   Americans suffering economic harm as a result of the COVID-19
12   pandemic.    One form of assistance provided by the CARES Act was
13   the authorization of United States taxpayer funds in forgivable
14   loans to small businesses for job retention and certain other
15   expenses, through a program referred to as the Paycheck
16   Protection Program (“PPP”).      PPP loan proceeds were required to
17   be used by the business to pay certain permissible expenses:
18   payroll costs, interest on mortgages, rent, and utilities.
19        5.     In order to obtain a PPP loan, a qualifying business
20   was required to submit a PPP loan application signed by an
21   authorized representative of the business.         The PPP loan
22   application required the applicant business (through its
23   authorized representative) to acknowledge the program rules and
24   make certain affirmative certifications in order to be eligible
25   to obtain the PPP loan.     Such certifications required the
26   applicant to affirm that “The [PPP loan] funds will be used to
27   retain workers and maintain payroll or make mortgage interest
28   payments, lease payments, and utility payments,” and that the


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 1   “loan proceeds will be used only for business-related purposes

 2   as specified in the loan application” and consistent with the

 3   PPP rules.    The authorized representative of the applicant was

 4   also required to certify that “the information provided in this

 5   application and the information provided in all supporting

 6   documents and forms is true and accurate in material respects,”

 7   and “I understand that if the funds are knowingly used for

 8   unauthorized purposes, the federal government may hold me

 9   legally liable, such as for charges of fraud.”

10          6.    In the PPP loan application, the applicant was

11   required to state, among other things, the business’s:

12   (a) average monthly payroll expenses and (b) number of

13   employees.    These figures were used to calculate the amount of

14   money the small business was eligible to receive under the PPP.

15   In addition, the applicant was required to provide documentation

16   showing its payroll expenses, including federal tax filings and

17   bank account records.

18          7.    A small business’s PPP loan application would be

19   received and processed by a participating lender approved by the

20   Small Business Administration (“SBA”).        If a PPP loan

21   application was approved, the participating lender would fund

22   the PPP loan using its own monies, which were guaranteed by the

23   SBA.

24          SBA-Approved Lender

25          8.    “Bank A” was a financial institution and an SBA-
26   approved participating lender of PPP loans based in Teaneck, New
27   Jersey, whose deposits were insured by the Federal Deposit
28   Insurance Corporation (“FDIC”).


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 1        9.    “Bank B” was a financial institution and an SBA-

 2   approved participating lender of PPP loans based in Salt Lake

 3   City, Utah, whose deposits were insured by the FDIC.

 4        10.   “Bank C” was a financial institution and an SBA-

 5   approved participating lender of PPP loans based in Minneapolis,

 6   Minnesota, whose deposits were insured by the FDIC.

 7   B.   THE SCHEME TO DEFRAUD

 8        11.   Beginning no later than in or around May 2020 and
 9   continuing until at least in or around December 2020, in Orange
10   County, within the Central District of California, and
11   elsewhere, defendant QADIRI, knowingly and with intent to
12   defraud, devised, participated in, and executed a scheme to
13   obtain moneys, funds, credits, assets, and other property owned
14   by and in the custody and control of Banks A, B, and C by means
15   of material false and fraudulent pretenses, representations, and
16   promises, and the concealment of material facts.
17        12.   The fraudulent scheme operated, in substance, as
18   follows:
19              a.   In May and June 2020, defendant QADIRI submitted,
20   and caused to be submitted, false and fraudulent applications to
21   Banks A, B, and C for PPP loans on behalf of the QADIRI-
22   controlled entities (collectively the “PPP Applications”).
23              b.   In the PPP Applications, defendant QADIRI made
24   and caused to be made, false and fictitious statements and
25   provided falsified documents to the SBA and Banks A, B, and C,
26   including inflating the number of employees to whom the
27   companies paid wages, providing altered bank account records
28   with inflated balances, providing fictitious Quarterly Federal

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 1   Tax Return Forms 941 that were never filed with the Internal

 2   Revenue Service, and falsely certifying that the loans would be

 3   used for permissible business purposes.

 4              c.   Defendant QADIRI electronically submitted, and

 5   caused to be submitted, the false and fictitious statements and

 6   falsified documents to the SBA and financial institutions in

 7   support of the fraudulent PPP loan applications to obtain large

 8   PPP loans for payroll and company expenses that did not exist.

 9              d.   In reliance on defendant QADIRI’s material false

10   and fraudulent statements and his concealment of material facts,

11   Banks A, B, and C approved and funded the PPP Loan Applications,

12   and thereafter transferred approximately $5 million in loan

13   proceeds by interstate wire into bank accounts that defendant

14   QADIRI controlled.

15              e.   Defendant QADIRI used the fraudulently obtained

16   PPP loan proceeds for his own personal benefit, including for

17   expenses prohibited under the requirements of the PPP program,

18   such as the purchase of luxury vehicles, to take lavish

19   vacations, and pay his personal expenses.

20        13.   Based on the fraudulent scheme above, defendant QADIRI

21   submitted and caused the submission of at least four fraudulent

22   PPP loan applications and received over $5 million in PPP

23   proceeds from Banks A, B, and C.

24   B.   EXECUTIONS OF THE SCHEME

25        14.   On or about the following dates, in Orange County,
26   within the Central District of California, and elsewhere,
27   defendant QADIRI committed and willfully caused others to commit
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 1   the following acts, each of which constituted an execution of

 2   the fraudulent scheme:

 3   COUNT        DATE          ACT
 4   ONE          5/21/2020     Submission of application for PPP Loan
                                to Bank A on behalf of RadMedia
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 6   TWO          5/29/2020     Submission of application for PPP Loan
                                to Bank B on behalf of AAL
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     THREE        6/1/2020      Submission of application for PPP Loan
 8                              to Bank C on behalf of Ad Blot
 9   FOUR         6/4/2020      Submission of application for PPP Loan
10                              to Bank B on behalf of in the name if
                                AACH
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      Case 8:21-cr-00081-JLS Document 1 Filed 05/05/21 Page 7 of 14 Page ID #:7



 1                         COUNTS FIVE THROUGH EIGHT

 2                             [18 U.S.C. § 1343]

 3        15.   The Grand Jury re-alleges paragraphs 1 through 10 and

 4   12 through 14 of this Indictment here.

 5   A.   THE SCHEME TO DEFRAUD

 6        16.   Beginning in or around May 2020 and continuing until
 7   at least in or around December 2020, in Orange County, within
 8   the Central District of California, and elsewhere, defendant
 9   MUSTAFA QADIRI, knowingly and with intent to defraud, devised,
10   participated in, and executed a scheme to defraud the SBA and
11   financial institutions as to material matters, and to obtain
12   moneys, funds, assets, and other property owned by and in the
13   custody and control of the SBA and Banks A, B, and C by means of
14   material false and fraudulent pretenses, representations, and
15   promises, and the concealment of material facts.
16        17.   The fraudulent scheme operated and was carried out, in
17   substance, as described in paragraph 12 of this Indictment.
18   B.   USE OF THE WIRES
19        18.   On or about the dates set forth below, in Orange
20   County, within the Central District of California, and
21   elsewhere, for the purpose of executing the above-described
22   scheme to defraud, defendant QADIRI transmitted and caused the
23   transmission of the following items by means of wire and radio
24   communication in interstate commerce:
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     Case 8:21-cr-00081-JLS Document 1 Filed 05/05/21 Page 8 of 14 Page ID #:8



 1   COUNT       DATE          INTERSTATE WIRE TRANSMISSION
 2   FIVE        5/22/2020     Transfer of approximately $840,937 in
                               PPP loan proceeds from Bank A, sent by
 3                             means of an interstate wire, into
                               RadMedia’s U.S. Bank Account in Newport
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                               Beach, California
 5   SIX         6/3/2020      Transfer of approximately $1,512,495 in
                               PPP loan proceeds from Bank B, sent by
 6                             means of an interstate wire, into AAL’s
                               U.S. Bank Account in Newport Beach,
 7                             California
     SEVEN       6/3/2020      Transfer of approximately $739,695 in
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                               PPP loan proceeds from Bank C, sent by
 9                             means of an interstate wire, into Ad
                               Blot’s Bank of America Account in
10                             Newport Beach, California
11   EIGHT       6/8/2020      Transfer of approximately $1,985,320 in
                               PPP loan proceeds from Bank B, sent by
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                               means of an interstate wire, into AACH’s
13                             Bank of America Account in Newport
                               Beach, California
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      Case 8:21-cr-00081-JLS Document 1 Filed 05/05/21 Page 9 of 14 Page ID #:9



 1                                  COUNT NINE

 2                     [18 U.S.C. §§ 1028A(a)(1), 2(b)]

 3        19.   The Grand Jury re-alleges paragraphs 1 through 10 and

 4   12 through 14 of this Indictment here.

 5        20.   On or about June 4, 2020, in Orange County, within the

 6   Central District of California, and elsewhere, defendant MUSTAFA

 7   QADIRI knowingly transferred, possessed, and used, and willfully

 8   caused to be transferred, possessed, and used, without lawful

 9   authority, a means of identification that defendant QADIRI knew

10   belonged to another person, namely, the name, social security

11   number, and signature of K.E., during and in relation to bank

12   fraud, a felony violation of Title 18, United States Code,

13   Section 1344(2), as charged in Count Four of this Indictment.

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 1                         COUNTS TEN THROUGH FIFTEEN

 2                             [18 U.S.C. § 1957]

 3         21.   On or about the dates set forth below, in Orange

 4   County within the Central District of        California, and

 5   elsewhere, defendant MUSTAFA QADIRI knowingly engaged in the

 6   following monetary transactions of a value greater than $10,000,

 7   involving funds that he knew to be criminally derived property,

 8   and which property, in fact, was derived from specified unlawful

 9   activity, that is, bank fraud, in violation of Title 18, United

10   States Code, Section 1344:

11   COUNT         DATE         TRANSACTION
12   TEN           6/8/2020     Withdrawal of $496,330 from AACH’s Bank
                                of America Account to purchase Cashier’s
13                              Check No. 1113010056
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     ELEVEN        6/8/2020     A $350,000 check drawn from AACH’s U.S.
15                              Bank Account to Newport Beach Automotive
                                Group with the memo “CBRE RE A06683.”
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     TWELVE        6/9/2020     A $70,000 check drawn from AACH’s U.S.
17                              Bank Account written to Klasse, a car
                                dealership, with the memo “Invoice
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                                0177830”
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     THIRTEEN      6/18/2020    A $290,027.73 check drawn from AACH’s
20                              U.S. Bank Account to “AN Texas Region,”
                                a car dealership, with the memo
21                              “Marketing”
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     FOURTEEN      6/18/2020    Withdrawal of $575,091.60 from
23                              RadMedia’s U.S. Bank to purchase
                                Cashier’s Check No. 4634525106
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     FIFTEEN       10/8/2020    Transfer of $37,374.25 from AACH’s U.S.
25                              Bank Account to American Express
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     Case 8:21-cr-00081-JLS Document 1 Filed 05/05/21 Page 11 of 14 Page ID #:11



 1                         FORFEITURE ALLEGATION ONE

 2                              [18 U.S.C. § 982]
 3        22.   Pursuant to Rule 32.2(a) of the Federal Rules of
 4   Criminal Procedure, notice is hereby given that the United
 5   States of America will seek forfeiture as part of any sentence,
 6   pursuant to Title 18, United States Code, Section 982(a)(2), and
 7   Title 28, United States Code, Section 2461(c), in the event of
 8   defendant’s conviction of the offenses set forth in any of
 9   Counts One through Eight or Ten through Fifteen of this
10   Indictment.
11        23.   The defendant so convicted shall forfeit to the United
12   States of America the following:
13              a.   A 2011 Ferrari 458 Italia, Vehicle Identification
14   Number ZFF67NFA3B0177830, registered to All American Capital
15   Holdings, Inc (“AACH”) with California license plate 8SCR262;
16              b.   A 2018 Lamborghini Aventador S, Vehicle
17   Identification Number ZHWUG4ZDXJLA06683, registered to AACH,
18   with California license plate 8RJT950;
19              c.   All right, title and interest in any and all
20   property, real or personal, constituting, or derived from, any
21   proceeds obtained, directly or indirectly, as a result of the
22   offense; and
23              d.   To the extent such property is not available for
24   forfeiture, a sum of money equal to the total value of the
25   property described in subparagraph (a).
26        24.   Pursuant to Title 21, United States Code, Section
27   853(p), as incorporated by Title 18, United States Code, Section
28   982(b) and Title 28, United States Code, Section 2461(c), the

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     Case 8:21-cr-00081-JLS Document 1 Filed 05/05/21 Page 12 of 14 Page ID #:12



 1   defendant so convicted shall forfeit substitute property, up to

 2   the total value of the property described in the preceding

 3   paragraph if, as the result of any act or omission of said

 4   defendant, the property described in the preceding paragraph, or

 5   any portion thereof: (a) cannot be located upon the exercise of

 6   due diligence; (b) has been transferred, sold to or deposited

 7   with a third party; (c) has been placed beyond the jurisdiction

 8   of the court; (d) has been substantially diminished in value; or

 9   (e) has been commingled with other property that cannot be

10   divided without difficulty.

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     Case 8:21-cr-00081-JLS Document 1 Filed 05/05/21 Page 13 of 14 Page ID #:13



 1                         FORFEITURE ALLEGATION TWO

 2         [18 U.S.C. §§ 982 and 1028A and 28 U.S.C. § 2461(c)]

 3        25.   Pursuant to Rule 32.2 of the Federal Rules of Criminal

 4   Procedure, notice is hereby given that the United States of

 5   America will seek forfeiture as part of any sentence, pursuant

 6   to Title 18, United States Code, Sections 982 and 1028 and Title

 7   28, United States Code, Section 2461(c) in the event of

 8   Defendant’s conviction of the offense set forth in Count Nine of

 9   this Indictment.

10        26.   The Defendant, if so convicted, shall forfeit to the

11   United States of America the following:

12              a.   A 2011 Ferrari 458 Italia, Vehicle Identification

13   Number ZFF67NFA3B0177830, registered to All American Capital

14   Holdings, Inc (“AACH”) with California license plate 8SCR262;

15              b.   A 2018 Lamborghini Aventador S, Vehicle

16   Identification Number ZHWUG4ZDXJLA06683, registered to AACH,

17   with California license plate 8RJT950;

18              c.   All right, title and interest in any and all

19   property, real or personal, constituting, or derived from, any

20   proceeds obtained, directly or indirectly, as a result of the

21   offense;

22              d.   Any personal property used or intended to be used

23   to commit the offense; and

24              e.   To the extent such property is not available for

25   forfeiture, a sum of money equal to the total value of the

26   property described in subparagraphs (a) and (b).

27        27.   Pursuant to Title 21, United States Code, Section

28   853(p), as incorporated by Title 18, United States Code,

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