'Guilty': Mount Vernon Men Convicted In $7.9M COVID Relief Scheme

MOUNT VERNON, NY — Three men, including two from Mount Vernon, have been found guilty for their parts in a $7.9 million COVID-19 fraud scheme.

Jacob Carter, Quadri Salahuddin, and Anwar Salahuddin were convicted for submitting more than 1,000 fraudulent applications for U.S. Small Business Administration Economic Injury Disaster Loans.

Damian Williams, the U.S. Attorney for the Southern District of New York, announced on Friday that a jury returned a guilty verdict against Jacob Carter, Quadri Salahuddin and Anwar Salahuddin for conspiracy to commit wire fraud, wire fraud, and aggravated identity theft in connection with a scheme to defraud the U.S. Small Business Administration that resulted in a loss to the agency of approximately $7.9 million. The defendants were found guilty of all counts following a two-week federal trial.

Williams praised the outstanding work of the Federal Bureau of Investigation.

"As the jury’s swift verdict shows, the proof at trial was overwhelming," Williams said. "The defendants schemed to steal from a taxpayer-funded program that was intended to help small businesses that were in desperate need of assistance during the COVID-19 pandemic. Let this be a lesson that my Office will continue to work to bring to justice against those who exploit and defraud government programs during a national emergency. We thank the FBI for their partnership in investigating and prosecuting the alleged scheme."

The SBA is a federal agency of the Executive Branch that administers assistance to American small businesses. This assistance includes making direct loans to applicants through the Economic Injury Disaster Loan ("EIDL") Program. In response to the COVID-19 pandemic, Congress expanded SBA’s EIDL Program to provide small businesses with low-interest loans of up to $2 million prior to in May 2020 in order to provide economic support to help overcome the loss of revenue small businesses were experiencing due to COVID-19. Applicants seeking a loan under the EIDL program were also permitted to request and receive an advance of approximately $1,000 per employee, for an amount up to $10,000, which the SBA generally provided while the loan application was pending.

From March through July 2020, Jacob Carter, Quadri Salahuddin, and Anwar Salahuddin used the identities of more than 1,000 others to submit more than 1,000 online applications to the SBA, seeking over $10 million in funds through the SBA’s EIDL Program.

In connection with the applications, the three falsely represented to the SBA that the applicants were the owners of businesses with 10 or more employees. However, the jury found that was a lie, and the applicants did not own businesses or employ people.

Based on the fraudulent applications, the SBA made advance payments of approximately $7.9 million to the applicants, who then kicked back a portion of the advance payments to Jacob Carter, Quadri Salahuddin, and Anwar Salahuddin. After collecting hundreds of thousands of dollars in kickback payments, the three took photographs of their stacks of cash, purchased expensive jewelry, and Carter even leased a Lamborghini.

Carter, 38, of Capitol Heights, Maryland, and Quadri Salahuddin, 28, and and Anwar Salahuddin, 38, both from Mount Vernon, were each convicted of one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory two-year consecutive sentence.

SEE ALSO: FBI: $7.6M COVID Relief Scam Rooted In The Hudson Valley