Arthur Allen, a 53-year-old businessman from New Orleans, pleaded guilty on April 22 before U.S. District Judge Jay C. Zainey to providing a false statement to a federal agency, according to an April 29 announcement by U.S. Attorney David I. Courcelle. Sentencing is scheduled for July 28.
The case highlights ongoing efforts by federal authorities to address fraud related to Covid-19 relief programs. The Department of Justice recently established the National Fraud Enforcement Division with the goal of investigating and prosecuting those who misuse taxpayer funds through fraudulent means.
According to court documents, Allen submitted an application on May 7, 2020, for a government-sponsored loan meant for small businesses affected by the pandemic. He falsely claimed his bed and breakfast business earned over $425,000 in gross receipts in 2019 and reported payroll tax deductions for employees that did not exist. Investigators found that the business had no revenue or paid employees during that year and determined Allen was responsible for losses totaling approximately $712,212.84.
Courcelle praised the Department of Homeland Security’s role in investigating the matter and confirmed that Assistant United States Attorney Richard R. Pickens II is leading the prosecution from the Financial Crimes Unit.
The maximum penalty for making false statements to a federal agency includes up to five years imprisonment and/or a fine up to $250,000, along with three years of supervised release and a mandatory special assessment fee of one hundred dollars.
The Fraud Section leads prosecutions involving schemes targeting programs like the Paycheck Protection Program (PPP). Since passage of the CARES Act, more than 150 defendants have been prosecuted across over 95 criminal cases involving PPP fraud; authorities have seized over $75 million as well as real estate properties and luxury items bought with illicit proceeds.
The U.S. Attorney for the Eastern District of Louisiana enhances community safety through law enforcement efforts according to its official website. The office operates under the U.S. Department of Justice according to its official website, enforces federal laws and prosecutes criminal cases according to its official website, is appointed by the President with Senate approval according to its official website, covers Southeast Louisiana according to its official website, holds chief law enforcement authority in its district according to its official website, and protects residents while handling civil matters and debt collection duties as well according to its official website.
