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SAN FRANCISCO -- Entrepreneur Ashraf "Mike" Ali was sentenced last week to 13 months in prison and fined $1.2 million for abusing federal small business loans for expanding upon a chain of Northern California convenience stores, the San Francisco Chronicle reported.
Federal prosecutors said Ali, 55, led a complex scheme where he helped partners launch stores in which he invested as a partial owner, but he hid his involvement so the partners would qualify for loans under the Small Business Administration, the report stated. Through the plot, he snagged $4.4 million in startup loans guaranteed by the administration, according to the Chronicle.
"He tried to help some of his business partners own their own stores, and he went about it the wrong way," Ali's attorney, Ed Swanson, told the paper.
Ali pleaded guilty to conspiracy and was sentenced in the U.S. District Court in San Francisco. He must begin his prison sentence by June and is expected to serve time at a camp-style facility, the report stated.
Ali’s wife, 52-year-old Yasmin Ali, also admitted to harboring up to 24 illegal immigrants who worked in the convenience stores. She was sentenced to six months of house arrest and fined $100,000, the report stated.
In addition, 12 others, many of whom are store owners, were convicted in connection with the conspiracy. All of the defendants agreed to repay the federal loans, and more than $4 million was already repaid, prosecutors told the paper. Swanson said Ali had to sell many of his businesses—which as of 2003 included 26 Fast and Easy convenience stores, a pair of Arby's restaurants and a Taco Bell—to repay the loans.
In November 2003, following the raid of his c-stores by state and federal agents, Ali told the Chronicle he had only tried to help other entrepreneurs and was a victim of discrimination based on his Pakistani roots.