Las Vegas businessman stole $11 million in PPP loans to fund lavish lifestyle, feds say
Contractors Council cited flooring company, documents show
LAS VEGAS (KLAS) – A Las Vegas businessman touted for building a “thriving” business is accused of stealing $11 million in federal loans meant to help struggling businesses during the pandemic, claiming that it had hundreds of employees for a single app when, in fact, it had none, according to court documents.
IRS criminal investigators allege Meelad Dezfooli of Henderson fraudulently received more than $11.2 million in PPP loans to buy homes and cars and fund investments. The Paycheck Protection Program was intended to help businesses pay and retain employees during the first year of the coronavirus pandemic.
A bank-sponsored article on a financial magazine’s website titled Deztooli “the dreamer” in 2019, saying he “built a thriving flooring business out of the ashes of the late-year recession. 2000”.
In April 2020, Dezfooli, who identified himself as the director and owner of Best Floors, inflated the company’s employee count and payroll, investigators wrote in court documents.
Dezfooli’s request mentioned a business address near Harry Reid International Airport on East Sunset Road, but “Best Floors did not have a lease at that address when the request was submitted,” investigators said in court documents. .
The 8 News Now I-Team visited the location and found it closed. All of Deztooli’s requests listed the East Sunset Road address, according to court documents.
Dezfooli’s application for a PPP loan said Best Floors’ “average monthly payroll” was about $440,000 to cover 76 employees, investigators said in court documents. Investigators said Deztooli had a quarterly payroll of less than $1,400 and one employee.
“Dezfooli falsely certified that the loan funds would be used to retain workers and maintain payrolls, consistent with PPP loans, when in fact Dezfooli intended to divert the majority of the proceeds for personal gain,” investigators said.
Additionally, investigators said Dezfooli falsely claimed the company paid $5.2 million in wages in 2019, when “salary payments were significantly lower” and the company had not filed. form declaring wages that year.
The Nevada State Contractors Board cited Deztooli and Best Floors in May 2020, a month after applying for the loan. The council has since revoked his license.
Also in April 2020, investigators said Dezfooli applied for a nearly $1.5 million PPP loan through a second company, which he “identified as the CEO” and owner, investigators said.
That company, called A-Series, had 10 employees, according to state records in 2020, but Deztooli said it had 96 employees, investigators said. Deztooli also said the business is located at the Sunset Road address. A supplemental loan for A-Series said the company paid more than $7 million in salaries in 2019. As part of the application process, Deztooli submitted a “fraudulent utility bill from NV Energy,” they said. investigators.
A third company, Nevada Sales, also received PPP money, investigators said. Dezfooli is accused of falsely saying he had 477 employees when there were none, investigators said. The business would also have been run by the Sunset Road location.
Investigators said they tracked the money to properties in Las Vegas and Henderson, as well as the purchase of a Tesla and a Bentley, documents show.
By March, IRS criminal investigators had opened more than 600 cases involving suspected tax evasion and money laundering related to COVID money, totaling about $1.8 billion, the report said. officials said.
“Unfortunately, even in times of crisis, criminals stick their heads out to look for ways to take advantage of those in their most vulnerable state,” IRS Criminal Investigations Chief Jim Lee said in a statement. a release earlier this year. “Through the investigative work of IRS-CI Special Agents and our law enforcement partners, we have ensured that criminals who attempt to defraud CARES Act programs face the consequences. of their actions.”
A public defender for Deztooli said he could not comment on ongoing litigation. The Federal Reserve Board, investigators from the Small Business Administration and the FDIC assisted in the case.
Anyone with information about Deztooli or other suspected cases of financial fraud can contact IRS Criminal Investigation Special Agent Arlette Lee at 702-868-5093.