After obtaining $5 million in federal COVID loans for phony businesses and then used the money for vacations and buying ultra-luxury cars like Ferrari, Bentley, and Lamborghini, a California man pleaded not guilty to the charges he is facing, prosecutors shared on Monday.

The 38-year-old man, identified as Mustafa Qadiri, was arrested on suspicion of scheming to defraud the Paycheck Protection Program (PPP). The program was implemented last year to help small businesses struggling during the coronavirus pandemic.

According to Associated Press, the U.S. Attorney's Office stated that the 38-year-old man from Irvine in Orange County, California, pleaded not guilty to multiple charges he faces, which include bank fraud, aggravated identity theft, money laundering, and wire fraud on Friday. 

Moreover, prosecutors stated that Mustafa Qadiri submitted fraudulent PPP loan applications to three banks on behalf of four companies that did not even exist on their list. 

The applications made by the California man include fake tax returns, false information regarding employees, and altered bank records based on the indictment.

Prosecutors added that Qadiri also used a name of a different individual and Social Security number and signature in making a fraudulent application for one of his loans. 

In total, Mustafa Qadiri has received $5 million in COVID loans that investigators mentioned he used for his trips, personal expenses, and even buying sports cars.

Federal agents have seized the Ferrari, Lamborghini, and Bentley cars that the California man purchased. Prosecutors also got close to $2 million from his bank accounts. 

The U.S. District Judge Josephine L. Staton scheduled a jury trial for June 29. The California man was released on a $100,000 bond, USA Today reported.

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First Year of COVID Loans Fraud Cases

After a year of global health and economic crisis, the pandemic brought much of the economy to a standstill. It also amounted to fraud cases underscore how the SBA or the Small Business Administration's oversight of its massive taxpayer-backed lending programs proved inadequate as they became magnets for fraudsters.

So far, the Justice Department has brought criminal charges against not less than 209 individuals out of 119 cases related to Paycheck Protection Program fraud since banks and other lenders started processing loan applications on behalf of the SBA on April 13, 2020. But the cases are just the beginning.

Based on POGO or the Project On Government Oversight's review of court filings up to April 2, it found that the charged individuals allegedly sought an estimated $445 million in Paycheck Protection Program loans. 

In late March, the Justice Department mentioned to Congress that it had charged $446.8 million in losses related to PPP, POGO reported.

More than half of that amount, which is around $246 million, went to accused fraudsters. This means that lenders and the SBA were not able to prevent the alleged fraud in these instances before taxpayer dollars went out the door.

Meanwhile, created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Paycheck Protection Program, as of April 11, has lent out $755 billion to businesses.

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WATCH: Orange County Man Arrested In PPP Fraud Scheme - From CBS Los Angeles