Sussex County Man Sentenced 64 Months: $5.6M Pandemic Loan Fraud

NEWTON, NJ — A Sussex County man was sentenced in federal court on Tuesday for money laundering and bank fraud after pleading guilty to the charges in July.

U.S. District Judge Esther Salas, the same judge who heard his guilty plea, sentenced Azhar Sarwar Rana, 31, of Newton, to 64 months prison time, for falsifying information to obtain $5.6 million in COVID-19 small business loans, said Acting U.S. Attorney Rachael A. Honig.

RELATED: Newton Man Admits Role In $5.6 Million Pandemic Loan Fraud

After his sentence, Honig said in a news release about the case, Rana is also expected to face “five years of supervised release.” He has additionally been ordered restitution of $5.59 million, with a forfeiture order of $5.68 million filed in the courts in September, allowing seizure of property.

Rana was taken into custody on Dec. 12, 2020, the same day he attempted to fly to Pakistan, after he was accused of falsifying payroll and tax documents, provided to a bank with a Paycheck Protection Program loan application.

He was able to successfully receive a $5.6 million in loans for his company, Azhar Sarwar Rana, LLC, a purported real estate developer.

Court documents show that Rana justified the loan was needed for several employee salaries in 2019 and 2020, which instead he funned “hundreds of thousands” to Pakistani bank accounts belonging to members of his family there, used the money to pay personal expenses, invested millions in stocks and handed over a $13,000 payment to a BMW dealership.

A joint investigation among several entities including the FBI, IRS, Social Security Administration, Department of Homeland Security and other agencies, found after looking at New Jersey Department of Labor records that Rana - who applied for a $10 million loan on April 6, 2020 - had no paid employees in 2019; and the names of those he reportedly paid in 2020 didn't match their Social Security numbers.

PPP loans, established during the pandemic with $300 billion authorized in April 2020, were intended to be used for small business payroll costs, as well as business rent, mortgage and utility payments.

The charges carried the possibility that Rana could have been sentenced for up to 30 years in prison plus been ordered to pay a $1 million fine for the bank fraud charges; and could have served a decade-long sentence and paid a $250,000 fine for money laundering.

COVID-19 fraud, abuse or waste complaints can be filed with the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or online here.

Questions or comments about this story? Have a local news tip? Contact me at: jennifer.miller@patch.com.