Sep 24, 2015 3:59 PM by News Staff
A Yuba City family is going to prison for running a scheme that enabled more than 400 people to defraud the United States Government.
A federal judge sentenced Mohammad Adnan Khan, 35, of Live Oak, to nine years in prison; Iqila Begum Khan, 32, of Live Oak, to five years in prison; and Mohammad Shahbaz Khan, 50, of Yuba City, to seven years and three months in prison and a $50,000 fine.
A fourth defendant, Mohammad Nawaz Khan, 60, is scheduled to be sentenced on October 1.
According to court documents, the Khans sold fake paystubs to people throughout the North State. They would then use companies they controlled to report false wages for the individuals who purchased those paystubs.
Prosecutors say the Khans would often tell the people purchasing the pay stubs how to fraudulently claim unemployment and disability benefits.
The family's reputation grew across Yuba City, and when the operation was at its peak the family had a store in Yuba City where they sold fraudulent pay stubs to customers on a walk-in basis.
Over the course of the conspiracy, the Khans reported wages for over 400 people, resulting in more than 2,000 fraudulent claims for unemployment and disability benefits. The loss in this case is more than $14 million.
To date, 28 individuals have been charged and 24 have pleaded guilty to various offenses connected to the scheme.
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