Three Defendants Convicted At Trial In $7.9 Million COVID-19 Fraud Scheme

Press Release Three Defendants Convicted At Trial In $7.9 Million COVID-19 Fraud Scheme Friday, February 9, 2024 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Jacob Carter, Quadri Salahuddin, and Anwar Salahuddin Were Convicted for Submitting More Than 1,000 Fraudulent Applications for U.S. Small Business Administration Economic Injury Disaster Loans Damian Williams, the United States Attorney for the Southern District of New York, announced today that a jury returned a guilty verdict against JACOB CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN for conspiracy to commit wire fraud, wire fraud, and aggravated identity theft in connection with a scheme to defraud the U.S. Small Business Administration (“SBA”) that resulted in a loss to the SBA of approximately $7.9 million. The defendants were found guilty of all counts following a two-week trial before U.S. District Judge Nelson S. Román. U.S. Attorney Damian Williams said: “As the jury’s swift verdict shows, the proof at trial was overwhelming. The defendants schemed to steal from a taxpayer-funded program that was intended to help small businesses that were in desperate need of assistance during the COVID-19 pandemic. Let this be a lesson that my Office will continue to work to bring justice to those who exploit and defraud government programs during a national emergency. We thank the FBI for their partnership in investigating and prosecuting the alleged scheme.” According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial: The SBA is a federal agency of the Executive Branch that administers assistance to American small businesses. This assistance includes making direct loans to applicants through the Economic Injury Disaster Loan (“EIDL”) Program. In response to the COVID-19 pandemic, Congress expanded SBA’s EIDL Program to provide small businesses with low-interest loans of up to $2 million prior to in or about May 2020 and up to $150,000 beginning in or about May 2020 in order to provide vital economic support to help overcome the loss of revenue small businesses were experiencing due to COVID-19. Applicants seeking a loan under the EIDL program were also permitted to request and receive an advance of approximately $1,000 per employee, for an amount up to $10,000, which the SBA generally provided while the loan application was pending. From March through July 2020, CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN used the identities of more than 1,000 other individuals (the “Applicants”) to submit more than 1,000 online applications to the SBA, seeking over $10 million in funds through the SBA’s EIDL Program (the “EIDL Applications”). In connection with the EIDL Applications, CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN falsely represented to the SBA that the Applicants were the owners of businesses with 10 or more employees. However, that was a lie – the individuals did not own businesses or employ people. Based on the fraudulent EIDL Applications, the SBA made advance payments of approximately $7.9 million to the Applicants, who then kicked back a portion of the advance payments to CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN. After collecting hundreds of thousands of dollars in kickback payments, CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN took photographs of their stacks of cash, purchased expensive jewelry, and CARTER leased a Lamborghini. * * * CARTER, 38, of Capitol Heights, Maryland, and QUADRI SALAHUDDIN, 28, and ANWAR SALAHUDDIN, 38, both of Mount Vernon, New York, were each convicted of one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory two-year consecutive sentence. The maximum and mandatory potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge. Mr. Williams praised the outstanding work of the Federal Bureau of Investigation. The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Jeffrey C. Coffman, Courtney L. Heavey, and Jared D. Hoffman are in charge of the prosecution, with the assistance of paralegal specialist Liam Ronan. Contact Nicholas Biase, Lauren Scarff (212) 637-2600 Updated February 13, 2024 Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 24-048

Press Release Three Defendants Convicted At Trial In $7.9 Million COVID-19 Fraud Scheme Friday, February 9, 2024 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Jacob Carter, Quadri Salahuddin, and Anwar Salahuddin Were Convicted for Submitting More Than 1,000 Fraudulent Applications for U.S. Small Business Administration Economic Injury Disaster Loans Damian Williams, the United States Attorney for the Southern District of New York, announced today that a jury returned a guilty verdict against JACOB CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN for conspiracy to commit wire fraud, wire fraud, and aggravated identity theft in connection with a scheme to defraud the U.S. Small Business Administration (“SBA”) that resulted in a loss to the SBA of approximately $7.9 million. The defendants were found guilty of all counts following a two-week trial before U.S. District Judge Nelson S. Román. U.S. Attorney Damian Williams said: “As the jury’s swift verdict shows, the proof at trial was overwhelming. The defendants schemed to steal from a taxpayer-funded program that was intended to help small businesses that were in desperate need of assistance during the COVID-19 pandemic. Let this be a lesson that my Office will continue to work to bring justice to those who exploit and defraud government programs during a national emergency. We thank the FBI for their partnership in investigating and prosecuting the alleged scheme.” According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial: The SBA is a federal agency of the Executive Branch that administers assistance to American small businesses. This assistance includes making direct loans to applicants through the Economic Injury Disaster Loan (“EIDL”) Program. In response to the COVID-19 pandemic, Congress expanded SBA’s EIDL Program to provide small businesses with low-interest loans of up to $2 million prior to in or about May 2020 and up to $150,000 beginning in or about May 2020 in order to provide vital economic support to help overcome the loss of revenue small businesses were experiencing due to COVID-19. Applicants seeking a loan under the EIDL program were also permitted to request and receive an advance of approximately $1,000 per employee, for an amount up to $10,000, which the SBA generally provided while the loan application was pending. From March through July 2020, CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN used the identities of more than 1,000 other individuals (the “Applicants”) to submit more than 1,000 online applications to the SBA, seeking over $10 million in funds through the SBA’s EIDL Program (the “EIDL Applications”). In connection with the EIDL Applications, CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN falsely represented to the SBA that the Applicants were the owners of businesses with 10 or more employees. However, that was a lie – the individuals did not own businesses or employ people. Based on the fraudulent EIDL Applications, the SBA made advance payments of approximately $7.9 million to the Applicants, who then kicked back a portion of the advance payments to CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN. After collecting hundreds of thousands of dollars in kickback payments, CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN took photographs of their stacks of cash, purchased expensive jewelry, and CARTER leased a Lamborghini. * * * CARTER, 38, of Capitol Heights, Maryland, and QUADRI SALAHUDDIN, 28, and ANWAR SALAHUDDIN, 38, both of Mount Vernon, New York, were each convicted of one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory two-year consecutive sentence. The maximum and mandatory potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge. Mr. Williams praised the outstanding work of the Federal Bureau of Investigation. The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Jeffrey C. Coffman, Courtney L. Heavey, and Jared D. Hoffman are in charge of the prosecution, with the assistance of paralegal specialist Liam Ronan. Contact Nicholas Biase, Lauren Scarff (212) 637-2600 Updated February 13, 2024 Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 24-048