In a significant move against financial misconduct, a federal grand jury in Santa Ana, California, has returned a superseding indictment against Mehrdad “Mitch” Tabrizi, the owner of several California-based businesses. The indictment, announced on May 22, 2024, charges Tabrizi with wire fraud, money laundering, tax evasion, and filing false corporate tax returns, highlighting his alleged exploitation of federal COVID-19 relief programs and deceptive financial practices.
Allegations of Fraudulent COVID-19 Relief Applications
Tabrizi, residing in Aliso Viejo, California, allegedly committed extensive fraud involving the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, two initiatives designed to support businesses affected by the COVID-19 pandemic. According to the indictment, from May 2020 to December 2021, Tabrizi submitted two fraudulent PPP loan applications for his company, Life Fleet Inc. He claimed that the business had 54 employees and monthly payroll expenses of $139,313, securing $695,565 in loans. Contrary to these claims, Life Fleet was reportedly not operational, had no employees, and had no payroll obligations. Tabrizi allegedly diverted the loan funds for personal use, violating the program’s intent to sustain employee wages and business operations during the pandemic.
In addition to the PPP fraud, Tabrizi allegedly submitted a false EIDL application for Life Fleet, claiming the business generated over $4 million in revenue and employed 63 people. Furthermore, he filed another fraudulent EIDL application for Resonante Group Inc., another company under his control, falsely stating that it had gross revenues of over $19 million and more than 300 employees. These deceptive applications resulted in the disbursement of approximately $319,800 from the Small Business Administration (SBA), funds Tabrizi was not entitled to receive and reportedly used for personal expenses.
Previous Tax Evasion Charges Against Mehrdad “Mitch” Tabrizi
The superseding indictment builds on previous charges against Tabrizi for tax evasion and filing false tax returns. Tabrizi operated Socal Medical Transportation Inc., incorporated in California. In 2015 and 2016, he allegedly deposited approximately $2.6 million into a bank account without disclosing these funds to the Certified Public Accountant (CPA) firm preparing the company’s corporate tax returns. Instead, Tabrizi claimed that these funds were received by a different business, effectively concealing substantial income and evading taxes.
Legal Proceedings and Potential Penalties
The federal charges against Mehrdad “Mitch” Tabrizi carry significant potential penalties. If convicted, he faces up to 20 years in prison for each count of wire fraud, up to 10 years in prison for each count of money laundering, up to 5 years in prison for each count of tax evasion, and up to 3 years in prison for each count of filing false tax returns. These severe penalties reflect the gravity of the alleged crimes and the federal government’s commitment to prosecuting financial misconduct.
The investigation, spearheaded by the IRS Criminal Investigation, underscores the federal government’s commitment to prosecuting financial crimes, especially those exploiting pandemic relief programs. Acting Deputy Assistant Attorney General Stuart M. Goldberg of the DOJ’s Tax Division and U.S. Attorney Martin Estrada of the U.S. Attorney’s Office for the Central District of California have emphasized the seriousness of these allegations and the ongoing efforts to hold individuals accountable for financial misconduct.
Trial Attorney Boris Bourget of the DOJ’s Tax Division and Assistant U.S. Attorney Brett Sagel for the Central District of California are leading the prosecution.
Presumption of Innocence
It is important to note that this indictment is merely an allegation. Tabrizi, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. This presumption of innocence is a fundamental principle of the American legal system, ensuring that every accused individual receives a fair trial.
The case against Mehrdad “Mitch” Tabrizi highlights the serious repercussions of defrauding federal relief programs and evading taxes. As the legal proceedings unfold, it serves as a stark reminder of the importance of integrity and honesty in financial practices. The federal government’s rigorous investigation and prosecution efforts aim to safeguard public funds and maintain trust in the systems designed to support businesses and individuals during unprecedented times like the COVID-19 pandemic.
