PLANO, Texas — A North Texas man is facing federal charges for his involvement in a COVID-19 fraud scheme.
Faruk Syed, 44, of Carrollton was indicted on Aug. 15, according to the U.S. Attorney's Office Eastern District of Texas.
The indictment charges Syed with conspiracy to commit wire fraud and money laundering.
He appeared before a judge for the first time on Thursday. At his court hearing, Syed was employed by the U.S. Small Business Administration (SBA) as a loan specialist and was responsible for reviewing and approving applications for Economic Injury Disaster Loans (EIDL) related to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The EIDL program, funded by the March 2020 CARES Act, was designed to help small businesses facing financial difficulties during the COVID-19 pandemic. EIDL funds are offered in low-interest rate loans, designated for specific business expenses, such as fixed debts, payroll, and business obligations.
The indictment, filed by Attorney Damien M. Diggs, accuses Syed of conspiring to submit multiple fraudulent applications for EIDL loans requesting hundreds of thousands of dollars of CARES Act funds.
As an SBA loan specialist, Syed approved fraudulent loan applications. He then received the loan proceeds and laundered the money through his Fidelity Investment account, officials say.
According to the New York Times, The exact amount of stolen relief funds is unknown, but the SBA’s inspector general estimated that more than $200 billion — or at least 17% of the roughly $1.2 trillion in pandemic loans the agency doled out — had been disbursed to “potentially fraudulent actors.”
