A Pleasanton man who runs a chain of convenience stores in California was sentenced to 13 months in prison and fined $1.2 million for an elaborate scheme in which he abused Small Business Administration loans to help business partners launch their own stores, California newspapers reported.
Federal officials say Ashraf "Mike" Ali, 55, owner of 26 Fast and Easy convenience stores in California’s Bay Area, led a conspiracy in which his business partners and other store owners submitted false loan applications to Bay-area lenders, Jack Gillund, spokesman for the U.S. attorney’s office, told the San Jose Mercury News.
The applications helped the group obtain $4.4 million in loans, Gillund told the newspaper.
The U.S. attorney’s office called the scheme "one of the largest and most extensive loan fraud schemes" in the western U.S., the San Francisco Chronicle reported.
The newspapers reported that Ali and his wife owned or controlled the chain of Fast and Easy c-stores in Northern and Central California, including in the Bay Area.
Ali had invested in the stores as a partial owner, but hid his involvement so partners would qualify for the loan program.
"He tried to help some of his business partners own their own stores, and he went about it the wrong way," Ali’s attorney, Ed Swanson, told the San Francisco Chronicle.
Ali pleaded guilty to conspiracy and was sentenced last week at the U.S. District Court in San Francisco. He begins his prison sentence by June and is expected to serve time at a camp-style facility.
His wife, Yasmin Ali, 52, also admitted to harboring up to 24 illegal immigrants who worked in the couple’s stores. She was sentenced to six months of house arrest and fined $100,000, the Chronicle reported.
A dozen others, many of them store owners, were convicted in connection with the conspiracy. All of the defendants agreed to repay the federal loans, and more than $4 million has already been repaid, prosecutors told the Chronicle.
The investigation lasted five years and involved multiple agencies that looked into the scheme, which ran from 1998 to 2003, The San Jose Mercury News reported.