Acting U.S. Attorney Michael M. Simpson announced that Clifton C. James, a 50-year-old resident of New Orleans, has been sentenced to five years of probation by U.S. District Judge Jane Triche-Milazzo. The sentencing follows charges related to making false statements, theft of government funds, and money laundering under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as well as filing a false tax return with the Internal Revenue Service.
The CARES Act was signed into law on March 27, 2020, providing emergency assistance to small business owners affected by the COVID-19 pandemic through programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).
According to court documents, James submitted false information on April 30, 2020, to secure an $86,800 PPP loan for his business. On July 13, 2020, he also obtained $149,900 from the SBA using a fraudulent application in the name of Crescent City Tax Services, LLC. These funds were then laundered through the purchase of an automobile in California. Additionally, James filed a false tax document claiming only $1 in earnings for his 2019 tax return.
Beyond probation, James is required to complete 50 hours of community service and pay restitution totaling $551,973 to the SBA and $233,645.65 to the IRS. A mandatory special assessment fee of $400 was also imposed.
The case was investigated by agents from the Pandemic Response Accountability Committee (PRAC) Fraud Task Force. This task force comprises members from various Inspectors General who oversee federal COVID-19 spending and address fraud across multiple programs.
Acting U.S. Attorney Simpson commended efforts by both the U.S. Department of Veterans Affairs – Office of Inspector General and IRS Criminal Investigation in this matter’s investigation. Assistant U.S. Attorney Edward J. Rivera led the prosecution.
For further details on the Department of Justice’s pandemic response or to report COVID-19-related fraud attempts, visit their website or contact their hotline.
