A Riverside County man was sentenced Nov. 14 to 102 months in federal prison for falsely obtaining over $6.6 million in COVID-19 small business relief funds.
Muhammad Atta, 39, of Corona, was also ordered by the judge to pay about $6.64 million in restitution.
“It’s important that the sentence imposed today sends the message that there are serious consequences for defrauding federal relief programs,” U.S. District Judge Percy Anderson said from the bench.
The federal government established the Paycheck Protection Program and Economic Injury Disaster Loan funds to help small businesses overcome financial difficulties during the pandemic by providing funds for rent, utilities, or up to eight weeks of payroll costs.
Atta pleaded guilty in August in Los Angeles to one count each of wire fraud and money laundering, according to the U.S. Attorney’s Office.
From March through July 2020, he submitted 11 fraudulent loan applications for seven shell companies. The applications misreported the number of employees and the average monthly payroll expenses of his companies and falsely claimed that the loan would be used for permissible business purposes. In support of his application, Atta also submitted false tax and payroll documentation, according to prosecutors.
Later, he laundered the funds obtained to bank accounts in the United States and Pakistan.
In May 2020, he received nearly $1.3 million for one of his companies, Envisioning Future, and soon transferred the money to his mother’s bank account. In the following month, he wired those funds to a financial institution in Islamabad, Pakistan.
According to the plea agreement, the wire transfer was noted for “family support.”
Atta fled the United States in May 2020 but was apprehended as he traveled through Los Angeles International Airport almost two years later.
He invested around $2.1 million of the funds into Pakistani financial instruments and another $3.5 million into purchasing land in Pakistan.
“By taking money that he was not entitled to, [Atta] reduced the funds available to other legitimate applicants and defrauded the taxpayers supporting the programs,” prosecutors argued in a sentencing memorandum.
