$455K In COVID Funding Spent By McLean Man On Gambling, Investments

MCLEAN, VA — A 65-year-old McLean business owner pleaded guilty Friday in federal court to defrauding the Small Business Administration out of approximately $455,000 in Paycheck Protection Program loans and Economic Injury Disaster Loan funds.

As the owner and sole employee of Integration Services Inc., Mehdi Pazouki admitted that between August 2020 and August 2021, he applied for and received approximately $455,000 in PPP loans and EIDL funds, according to court documents.

When Pazouki applied for the funding, he stated that he was going to use the money for business expenses related to the IT consulting company that he ran from his McLean home. However, he admitted in court that he used the PPP loans and EIDL funds to pay for gambling at local casinos, pay down personal debt, and purchase real estate, according to court documents.

Within days of receiving his first disbursement, Pazouki spent more than $27,000 at Hollywood Casino in Charles Town, West Virginia, according to court documents. He also used the money for down payments on two real estate properties, fund his persona investment account, and pay off his credit card debt. In loan forgiveness applications to the SBA, Pazouki falsely claimed that he had used the PPP money for legitimate business expenses.

Pazouki is due back in court on May 24 for sentencing, where he will face a possible maximum sentence of 20 years in prison.

SBA-backed PPP loans and EIDL funds were used to help small businesses keep their workforce going during the COVID-19 pandemic.