Centennial Man Sentenced to Federal Prison for COVID-related Frauds

The U.S. Attorney’s Office for the District of Colorado announces that Anthony Zaghab, age 52, of Centennial, Colorado, was sentenced to 30 months in federal prison for wire fraud based on his submission of numerous false applications for COVID-related relief funds.  Zaghab was also ordered to pay $708,141 in restitution. 

According to the plea agreement, beginning in April 2020, and continuing until early February of 2021, Zaghab knowingly engaged in a scheme to defraud the United States, the State of Colorado, and a bank to obtain pandemic-relief funds to which he was not entitled.  He did this by submitting false and fraudulent Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) applications to the Small Business Administration and to a bank.  From these SBA programs, Zaghab obtained $666,630.  He also sought and obtained $41,511 in Pandemic Unemployment Insurance payments from the State of Colorado for ineligible family members.

With respect to the false EIDL applications, Zaghab falsely stated the number of employees, the purported gross revenues, and the purported cost of goods sold for certain business entities under his name.  Zaghab also applied for and attempted to obtain EIDLs on behalf of fictitious or purported business entities created in the names of his family members without the knowledge or consent of these family members.  Zaghab falsely represented that the funds would be used to pay payroll and other permissible expenses when, in fact, Zaghab used the majority of these proceeds for his personal benefit. 

In addition to the fraudulent EIDL applications, Zaghab submitted four fraudulent PPP loan applications to a bank.  All four PPP loan applications were approved and funded.  In these applications, Zaghab falsely represented when the alleged businesses had been established and the monthly payroll for each fictitious entity.  Zaghab obtained a total of $83,330 in PPP loan proceeds based on these false representations, which he used for his own personal benefit instead of to pay permissible expenses, like payroll.

Zaghab also applied for and obtained approximately $41,511 in Colorado Pandemic Unemployment Assistance (PUA) for ineligible family members without their knowledge and consent.  Specifically, in April 2020, Zaghab applied for and obtained PUA for his sister and his mother, both of whom resided outside of the United States.  Zaghab submitted these applications without the knowledge of his sister or mother and used the money for his own personal benefit.  In or around April 2020, Zaghab also applied for and obtained PUA for his father who is and was deceased at the time of the application.

“Pandemic-relief funds were supposed to be used to save small businesses and to support individuals devastated by COVID-19,”  said United States Attorney Cole Finegan.  “Together with our law enforcement partners, we are holding criminals accountable for stealing from the generosity of the American taxpayer.”

“This prison sentence and restitution order should serve as a strong deterrent against COVID-19 related fraud,” said Marc DellaSala, Special Agent in Charge, U.S. Secret Service Denver Field Office. “We will vigorously pursue anyone stealing from government aid programs intended for struggling small businesses and families. I want to thank the U.S. Attorney’s Office and our pandemic fraud task force partners for their continued dedication to protecting America’s financial infrastructure.”

“Today’s sentencing in the Zaghad fraud case is an example of how the statewide task force we set up earlier this year is working. With our state and federal partners, we are investigating and going after those who committed fraud against the state’s unemployment insurance program and the identity theft that has affected thousands of Coloradans during the pandemic. Our work continues, and when wrongdoers can be identified, we’ll hold them accountable,” said Colorado Attorney General Phil Weiser.

"Program integrity has and will continue to be a focus of the Unemployment Insurance division, ensuring that those who engage in fraud within the program are brought to justice and stolen funds recovered" said Phil Spesshardt, Colorado Unemployment Insurance Division Director. 

United States District Court Judge R. Brooke Jackson sentenced Zaghab on December 15, 2021.

The United States Secret Service and the Colorado Department of Labor and Enforcement conducted the investigation.  Assistant United States Attorneys Martha A. Paluch and Rebecca S. Weber handled the prosecution of the case.

Case number:  21-cr-0188

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