Zain Khan, Million-dollar PPP scheme, Texas 2021

A 43-year-old Sugar Land man has been sentenced to prison for submitting fake and fraudulent Small Business Administration (SBA) Paycheck Protection Program (PPP) loan application documents and collecting the money for personal use.

HOUSTON - Zain Khan pleaded guilty on April 10 for submitting the fake documents to qualify for program funds.

Under the CARES Act, the federal government created the PPP to protect jobs during the 2020 pandemic. The PPP allows entities to apply for low-interest private loans to pay for payroll and certain other related costs.

Khan created a fictitious temporary workforce business and payroll documents to qualify for program funds. He then converted the program funds for personal use to be invested in stock trading.

The scheme caused a loss of more than $1 million. Khan was ordered to pay $1 million in restitution to the SBA.

U.S. District Judge Lee H. Rosenthal noted the severity of Khan's criminal activity at a time when the country was suffering from the effects of the COVID-19 pandemic.

In handing down the sentence, Judge Rosenthal ordered Khan to serve 48 months in federal prison to be immediately followed by three years of supervised release.

Khan was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

Source: https://www.justice.gov/usao-sdtx/pr/million-dollar-ppp-scheme-sends-sugar-land-man-prison