Las Vegas businessman stole $11 million in PPP loans to fund lavish lifestyle, feds say

Contractors Board had cited flooring company, documents reveal

LAS VEGAS (KLAS) — A Las Vegas businessman touted for building “a thriving” company is accused of stealing $11 million of federal loans meant to help struggling businesses during the pandemic, claiming he had hundreds of employees for one application when, in fact, he had none, court documents said.

IRS criminal investigators allege Meelad Dezfooli, of Henderson, fraudulently received more than $11.2 million in PPP loans to buy homes and cars and to fund investments. The Paycheck Protection Program was intended to help companies pay and retain employees during the first year of the coronavirus pandemic.

A sponsored article from a bank on a financial magazine’s website called Dezfooli “the dreamer” in 2019, saying he “built a thriving flooring business out of the ashes of the recession in the late 2000s.”

In April 2020, Dezfooli, who identified himself as the manager and owner of Best Floors, inflated the company’s employee count and payroll, investigators wrote in court documents.

Dezfooli’s application listed a business address near Harry Reid International Airport on East Sunset Road, but “Best Floors did not have a lease at this address when the application was submitted,” investigators said in court documents.

The 8 News Now I-Team visited the location, finding it closed. All of Dezfooli’s applications listed the East Sunset Road address, court documents said.

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 Dezfooli 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 payroll, in accordance with PPP loans, when, in fact, Dezfooli intended to divert the majority of the proceeds for personal benefit,” investigators said.

In addition, investigators said Dezfooli falsely claimed the company had paid $5.2 million in wages in 2019, when, the “wage payments were significantly lower” and the company did not file a form declaring wages that year.

The Nevada State Contractors Board cited Dezfooli and Best Floors in May 2020, a month after he filed for the loan. The board has since revoked his license.

Also in April 2020, investigators said Dezfooli applied for a PPP loan of nearly $1.5 million through a second company, which he “identified himself as the CEO” and owner, investigators said.

That company, called A-Series, had 10 employees, according to state records in 2020, but Dezfooli reported having 96 employees, investigators said. Dezfooli also said the business was at the Sunset Road address. An additional loan for A-Series said the company had paid more than $7 million in wages in 2019. As part of the application process, Dezfooli submitted a “fraudulent NV Energy utility bill,” investigators said.

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 was also reportedly run through the Sunset Road location.

Investigators said they tracked the money to properties in Las Vegas and Henderson, and the purchase of a Tesla and Bentley, documents said.

As of March, IRS criminal investigators had opened more than 600 cases involving suspected tax fraud and money laundering related to COVID money, totaling about $1.8 billion, officials said.

“Unfortunately, even during times of crisis, criminals pop their heads out to look for ways to take advantage of those in their most vulnerable state,” IRS Criminal Investigator Chief Jim Lee said in a statement earlier this year. “Thanks to the investigative work of IRS-CI special agents and our law enforcement partners, we’ve ensured criminals who try to defraud CARES Act programs face consequences for their actions.”

A public defender for Dezfooli said he could not comment on pending litigation. The Federal Reserve Board, investigators with the Small Business Administration, and the FDIC aided in the case.

Anyone with information about Dezfooli or other suspected financial fraud cases can contact IRS Criminal Investigation Special Agent Arlette Lee at 702-868-5093.