A man in California who received more than $5 million in Payment Protection Program loans intended to help struggling businesses during the coronavirus pandemic was arrested on Friday on federal bank fraud and other charges after he used the money to buy a Lamborghini and other luxury cars, federal prosecutors said.
The man, Mustafa Qadiri, 38, of Irvine, was indicted by a federal grand jury on four counts of bank fraud, four counts of wire fraud, one count of aggravated identity theft and six counts of money laundering, the U.S. attorney in the Central District of California announced.
Federal prosecutors said Mr. Qadiri’s efforts to obtain federal loans started in late May 2020 and netted him nearly $5.1 million by early June. Mr. Qadiri is accused of using that money to go on a spending spree that included buying a Ferrari, a Lamborghini and a Bentley and paying for “lavish vacations,” all of which are prohibited under the Payment Protection Program, prosecutors said.
Bilal A. Essayli, a lawyer for Mr. Qadiri, declined to comment.
Mr. Qadiri submitted applications to three different banks for Covid-19 relief funds in order to help four companies based in California that, in fact, were not in operation, prosecutors said. In addition to submitting fraudulent company information and “altered bank account records,” Mr. Qadiri is also accused of using someone else’s name, Social Security number and signature on the applications, according to a statement from prosecutors.
Some of Mr. Qadiri’s assets have already been seized, prosecutors said. Federal agents confiscated a 2011 Ferrari 458 Italia that was registered to All American Capital Holdings, one of the companies listed on Mr. Qadiri’s P.P.P. loan applications, they said. A 2018 Lamborghini Aventador S, registered to the same company, was also seized, they said.
The 2011 Ferrari 458 Italia can sell for more than $100,000, according to Cars.com, which says in a review that the vehicle “can perform as well as strain gawkers’ necks.” It has a V-8 engine and 570 horsepower and can go from zero to 62 miles per hour in 3.4 seconds, “which is about as fast as anyone can expect to go in a car today that doesn’t shoot flames out the back,” the review says.
Another popular site for auto enthusiasts, Kelley Blue Book, has a listing for a 2011 Ferrari 458 Italia selling for $179,000. The site also has a review of the 2018 Lamborghini Aventador S that declares, “There’s no better car to show off your success or stroke your ego.” That car has a V-12 engine and 740 horsepower and can go from zero to 60 m.p.h. in less than three seconds. Among its drawbacks, according to the review: “The Aventador isn’t the most comfortable car to ride in, nor is it terribly efficient, earning an E.P.A. estimated 10 m.p.g. in city driving.”
On Lamborghini.com, the webpage describing the Aventador S has the tag line “Dare your ego.”
Prosecutors said in a statement that another luxury vehicle Mr. Qadiri bought with PPP money, a 2020 Bentley Continental GT Coupe, was also seized.
A spokesman for the U.S. attorney’s office said that if Mr. Qadiri was convicted, the charges against him carried a combined maximum penalty of 302 years in prison.
Numerous people have been arrested and charged with misusing pandemic relief funds. Mr. Qadiri is at least the third person to face charges specifying the purchase of a Lamborghini.
In July, a man in Florida who received nearly $4 million was arrested on bank fraud and other charges after buying a blue Lamborghini for $318,497, federal prosecutors said. In August, a man in Texas who received more than $1.6 million from the same federal program was arrested on bank fraud and other charges after buying, among other things, a 2019 Lamborghini Urus, for $233,337.60, prosecutors said.
In February, the Florida man, David T. Hines, pleaded guilty to one count of wire fraud, which carries a maximum punishment of up to 20 years in prison. He is awaiting sentencing. The case against the Texas man, Lee Price III, is continuing.