The owner of a wedding planning company last week pleaded guilty to filing fraudulent loan applications seeking more than $3 million in forgivable Paycheck Protection Program (PPP) loans and used the proceeds he did receive – more than $1.5 million – to pay off his mortgage and to buy securities, two Teslas, two Freightliner trucks, and a Mercedez Benz Van.
The Federal Deposit Insurance Corp. (FDIC) Office of Inspector General (OIG) said that Fahad Shah, 44, of Murphy, Texas, admitted that he sought more than $3 million in PPP loans from two different Small Business Administration-approved lenders. In one application, Shah sought more than $1.7 million in PPP loan proceeds by fraudulently claiming that his company, WBF Weddings by Farah Inc. (WBF), employed 126 individuals with an average monthly payroll of more than $700,000; in the second, Shah sought more than $1.5 million in PPP loan proceeds, this time claiming that his 126-employee company had an average monthly payroll of more than $600,000. Court documents showed that WBF had only two employees, the FDIC said.
The agency also said Shah submitted fraudulent Employer’s Quarterly Federal Tax Return (IRS Form 941) documents for 2019.
Shah was indicted by a federal grand jury on June 18, 2020, and pleaded guilty to wire fraud May 19. He faces up to 20 years in federal prison, the FDIC OIG said.