Sixth Defendant in $3 Million COVID-19 Fraud Ring Pleads Guilty

Sixth Defendant in $3 Million COVID-19 Fraud Ring Pleads Guilty

A Falls Church man pleaded guilty today to conspiring to commit wire fraud, bank fraud and to make false statements on loan applications in connection with COVID-relief loans.

Foad Darakhshan, 46, of McLean; Haleh Farshi, 44, of Ashburn; Farough Darakhshan, 39, of Great Falls; Shoughi Darakhshan, 30, of McLean; and Marcus Gharib, 29, of Tysons all previously pleaded guilty for their involvement in the conspiracy.

According to court documents, Fouzi Darakhshan, 36, conspired with his brothers and their friends to submit falsified loan applications in order to obtain Paycheck Protection Program (PPP) loans through banks and Economic Injury Disaster Loans (EIDL) through the Small Business Administration. Altogether, the defendants wrongfully obtained over $3 million in loan proceeds. They submitted at least 63 loan applications, of which 17 were approved.

The defendants used multiple shell entities they controlled to apply for PPPs and EIDLs and falsified IRS tax forms submitted to lenders. They engaged in a group WhatsApp chat devoted to executing the fraud scheme, openly discussing falsifying documents and inflating the numbers of employees, company revenues, and payroll figures in order to induce lenders to make the loans.

The defendants are scheduled to be sentenced beginning in July and concluding in September. They face up to 5 years in prison, full restitution, and forfeiture.