A Nevada man was sentenced to over 15 years in prison and five years of supervised release for fraudulently obtaining more than $11 million in Paycheck Protection Program loans guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act and then laundering the funds through real estate transactions, gambling activity, and luxury purchases.
The defendant was also ordered to pay $11.2 million in restitution, forfeit two vehicles and five properties.
“This defendant stole more than $11 million in taxpayer funds that he used to finance luxury purchases and gambling,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “Prosecuting schemes like this is critical to protecting the contributions of hard-working Americans, preserving confidence in government relief programs, and ensuring that aid reaches those who truly need it. This sentence demonstrates the Criminal Division’s continuing commitment to protecting the public’s money from thieves and fraudsters.”
Meelad Dezfooli, of Henderson, Nevada, submitted three fraudulent PPP applications for entities that he controlled and took $11 million meant for people who needed it.
“The consequences of the defendant’s PPP loan fraud scheme have caught up with him and now he will be incarcerated for exploiting more than $11.2 million from a taxpayer-funded program,” said Acting U.S. Attorney Sigal Chattah for the District of Nevada. “Thanks to the diligent work of our law enforcement partners, the defendant is being held accountable for defrauding the government.”
Dezfooli supported these applications with false documents, including fabricated tax records and a utility bill, and grossly inflated the number of employees and payroll expenses of each entity. After receiving the PPP funds, Dezfooli laundered the money by purchasing approximately 25 properties in Nevada, often using the alias “James Dez” or a fictitious entity called “Holdings Trust.”
“This lengthy sentence shows how seriously the American government takes PPP loan fraud,” said Special Agent in Charge Carissa Messick of IRS Criminal Investigation’s (IRS-CI) Phoenix Field Office. “This loan program was created to support small businesses and their employees during a once in a lifetime pandemic. When Mr. Dezfooli fraudulently obtained these loans, he not only stole from the Small Business Administration, but also from American taxpayers to the tune of $11.2 million. This sentencing is a testament to IRS-CI’s dedication to protecting American taxpayers and ensuring the integrity of our tax system.”
Even after he was indicted, Dezfooli continued laundering money, including selling property purchased with the illegally obtained PPP funds. He also used criminal proceeds to fund his personal investment account, buy luxury cars, and gamble extensively throughout Las Vegas.
Law enforcement seized five homes during the investigation.
On Sept. 4, 2024, a jury found Dezfooli guilty of three counts of bank fraud, three counts of money laundering, and four counts of conducting transactions using criminally derived property.
“Today’s sentencing holds accountable and brings to justice a fraudster who stole millions of taxpayer dollars intended to help small business owners,” said Special Agent in Charge Jon Ellwanger of the Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau Western Region.
Dezfooli continued to commit fraud after he had been charged, according to the document.
Even after he was indicted, Dezfooli continued laundering money, including selling property purchased with the illegally obtained PPP funds. He also used criminal proceeds to fund his personal investment account, buy luxury cars, and gamble extensively throughout Las Vegas. As part of this investigation, five homes were seized by law enforcement. On Sept. 4, 2024, a jury found Dezfooli guilty of three counts of bank fraud, three counts of money laundering, and four counts of conducting transactions using criminally derived property.
The IRS-CI, FRB-OIG, FDIC-OIG, and SBA-OIG investigated the case.
Trial Attorneys D. Zachary Adams and Taylor G. Stout of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Daniel R. Schiess for the District of Nevada prosecuted the case. Legal Assistant Alexa Stiles and Paralegal Holly Butler of MLARS provided substantial assistance throughout the investigation and trial.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
Editor’s Note: Do you enjoy Townhall’s conservative reporting that takes on the radical left and woke media? Support our work so that we can continue to bring you the truth.
Join Townhall VIP and use the promo code FIGHT to get 60% off your VIP membership!
Join the conversation as a VIP Member