Dentist used fake restaurant businesses to steal millions in COVID funds, feds say

Charlotte Observer (NC)

A former Oregon dentist filed dozens of fraudulent loan and grant applications, in some instances using fictitious restaurant businesses, to steal nearly $11.5 million in COVID-19 relief funds, prosecutors said.

Salwan Adjaj, 43, pleaded guilty on Tuesday, Sept. 13, to “wire fraud and aggravated identity theft,” the United States Attorney’s Office District of Oregon said in a news release.

Adjaj’s lawyer did not immediately respond to McClatchy News’ request for comment on Sept. 14.

From September 2020 to May 2021, Adjaj submitted dozens of loan applications to the Small Business Administration (SBA) to acquire Economic Impact Disaster Loans (EIDL) and funds from the Paycheck Protection Program (PPP), prosecutors said.

Both programs, authorized by the Coronavirus Aid, Relief, and Economic Security Act, allowed small businesses affected by the pandemic to apply for low-interest loans, according to the district attorney’s office.

From these fraudulent loan applications, in which prosecutors said Adjaj used fictitious business names and employer identification numbers along with his residence as the business mailing address, he received about $3.6 million, according to a plea agreement.

After SBA began to reject Adjaj’s EIDL applications, he turned his focus to PPP funds, as well as the Restaurant Revitalization Fund (RRF), a program authorized by the American Rescue Plan Act (ARPA) that supported “restaurants, bars, and other food- and drink-related businesses,” according to the district attorney’s office.

Adjaj stole about $7.8 million in grants from the fund, according to a plea agreement.

Adjaj submitted three RRF applications for restaurants he said were located in “Sarasota, Miami, and Daytona Beach, Florida,” prosecutors said.

As with his EIDL and PPP applications, these applications had “false business information and all listed his personal residence as the business mailing address,” prosecutors said.

Adjaj was arrested in December after being charged with “wire fraud and aggravated identity theft” last October, prosecutors said.

In a separate case, Adjaj also pleaded guilty in July to “illegally distributing controlled substances,” the district attorney said.

“Adjaj further admitted to using his position as a dentist to obtain some of the drugs he illegally distributed,” prosecutors said.

Adjaj faces a maximum 22-year prison sentence, $250,000 fine and three years of supervised release in the COVID-19 relief case, the district attorney said, as well as an additional “10 years in prison, a $500,000 fine, and three years of supervised release” for the drug-related case.

Adjaj also agreed to “pay no less than $10.5 million in restitution to SBA and his victim lenders” in his plea agreement, according to the district attorney.

Adjaj’s sentencing for both cases is scheduled for December, the district attorney said.

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