HOUSTON — A Houston-area man has been sentenced to four years in federal prison for submitting fraudulent Small Business Administration (SBA) Paycheck Protection Program loan application documents and collecting the money for personal use.
The investigation that uncovered the scheme was conducted by Homeland Security Investigations (HSI) Houston.
Zain Khan, a 43-year-old resident of Sugar Land, was sentenced Aug. 7 in the U.S. District Court for the Southern District of Texas to four years in federal prison to be immediately followed by three years of supervised release. Khan pleaded guilty to wire fraud on April 10. He was further ordered to pay $1 million in restitution to the Small Business Administration.
“While many Americans were struggling just to get by during an unprecedented global health crisis, this individual defrauded the federal government and taxpayers out of more than one million dollars of emergency funds intended to help keep struggling businesses and employees afloat,” said HSI Houston Special Agent in Charge Mark Dawson. “Thanks to the hard work and determination of our special agents and support staff, we were able to uncover his scheme and hold him accountable for exploiting the Paycheck Protection Program for his own profit.”
In or around April 2021, Khan created a fictitious temporary workforce business and payroll documents to qualify for program funds. Khan then converted the program funds for personal use to be invested in stock trading. At the hearing, the court heard additional testimony that described how Khan almost immediately lost the money he stole in various stock trading maneuvers. In total, the scheme caused a loss of more than $1 million.
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.
Assistant U.S. Attorneys Craig M. Feazel and Thomas Carter prosecuted the case.
For more news and information on HSI’s efforts to aggressively investigate COVID-19-related fraud and other financial crime in Southeast Texas follow us on X, formerly known as Twitter, at @HSIHouston.
Anyone with information about suspected COVID-19-related fraud or other criminal activity is encouraged to report it to HSI’s S.T.O.P. COVID-19 Fraud Tipline at covid19fraud@dhs.gov.
About HSI
HSI is the principal investigative arm of the Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel and finance move. HSI’s workforce consists of over 10,000 employees, assigned to 235 offices within the United States and 93 overseas locations in 56 countries. HSI's international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.