A former Overland Park, Kansas, man was sentenced in federal court 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 to 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 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 for $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 for $420,000. Reazuddin made similar false statements on this application.
Assistant U.S. Attorney Paul S. Becker prosecuted this case. It was investigated by IRS-Criminal Investigation.
