Irvine, California: A man has been arrested and charged for allegedly obtaining $US5 million ($6.3 million) in COVID-19 relief funds for his “sham businesses”.

He is accused of using the money to buy luxury sports cars, US federal authorities said.

Mustafa Qadiri, 38, was named in a federal grand jury indictment charging him with six counts of money laundering, four counts of bank fraud, four counts of wire fraud, and one count of aggravated identity theft.

Prosecutors say Qadiri claimed to operate four companies - All American Lending and All American Capital Holdings were purportedly mortgage businesses, while RadMediaLab and Ad Blot were advertising businesses.

In May and June 2020, he submitted false Paycheck Protection Program loan applications to three banks on behalf of those companies, according to the indictment.

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Those loans were made available through the recently CARES Act, designed to provide emergency funding to help Americans suffering from the economic effects of the COVID-19 pandemic. Part of the funds were forgivable loans to small businesses to retain employees and for other expenses.

Authorities allege that in the applications, Qadiri changed bank account records with inflated balances, gave false information about how many employees were paid wages, and gave fake quarterly federal-tax return forms.

He is also accused of using someone else’s name, social security number and signature to apply for one of the loans.