United States files civil complaint against brothers, alleging pandemic fraud

FILE Eggs Courtesy U S Food and Drug Administration The United States filed a civil complaint against two brothers last week alleging that they obtained more than million in pandemic-related loans by lying on applications and fraudulently claiming funds for businesses that did not exist The civil complaint alleges that between March and April brothers Duraid A Zaia and Kusay Karana received four Pandemic Protection Venture loans for four businesses two purportedly owned by Zaia and two by Karana receiving a total of approximately million dollars in PPP loans as a development COVID-relief programs were designed to help people and businesses under extreme financial stress during the pandemic explained U S Attorney Adam Gordon in a comment This complaint seeks to hold accountable those who took advantage of those programs by fraud My office will continue to pursue those who knowingly cheat taxpayers by abusing the Paycheck Protection Undertaking and other pandemic-related programs The complaint alleges that the businesses were either nonexistent or that their sizes were grossly exaggerated such as paperwork filed for Zaia s Ramona Egg Ranch which claimed that the business had annual payroll costs of more than million but federal tax returns proved annual payroll costs of just The complaint also alleges that Zaia and Karana bolstered their loans by fabricating lists of employees who worked at their businesses This incident is being handled by Assistant U S Attorney Stephen H Wong of the Civil Division of the U S Attorney s Office for the Southern District of California The Paycheck Protection Campaign offered relief by authorizing hundreds of billions of dollars in potentially-forgivable loans to small businesses for job retention and certain other expenses The loan applications required the borrower to certify the type of business the number of employees the business supported and that the business was in operation as of February Borrowers were eligible to seek loan forgiveness if they spent it on employee payroll and other eligible expenses Anyone with information about statements of attempted fraud involving COVID- can review it by calling the Department of Justice s National Center for Accident Fraud Hotline at - or via the NCDF Web Complaint Form