New Orleans Businessman Guilty of Covid-19 Relief Fraud totaling approximately $712,212.84 in loses

NEW ORLEANS, LOUISIANA – U.S. Attorney David I. Courcelle announced that ARTHUR ALLEN (“ALLEN”), age 53, of New Orleans, pleaded guilty on April 22, 2026, before U.S. District Judge Jay C. Zainey, to providing a false statement to a federal agency. Sentencing is set for July 28, 2026.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division. The core mission of the Fraud Division is to zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars.  Department of Justice efforts to combat fraud support President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

According to court documents, on or about May 7, 2020, in the Eastern District of Louisiana, ALLEN provided a materially false statement to the Small Business Administration in an application to obtain a government sponsored loan designed to assist small business owners during the COVID-19 pandemic. During the application process, ALLEN falsely claimed his bed and breakfast company received gross over $425,000 in gross receipts and revenue in 2019. ALLEN also claimed he deducted and submitted payroll taxes on behalf of his employees in 2019; however, an investigation of bank records revealed the ALLEN business generated no receipts or revenue in 2019 and failed to pay any employees in 2019. Further results of the investigation confirmed that ALLEN is responsible for a total loss of approximately $712,212.84.

The maximum penalty for false statements to a federal agency is five years imprisonment and/or a fine of up to $250,000, followed by up to three years of supervised release, and a mandatory special assessment fee of one hundred dollars.

U.S. Attorney Courcelle praised the work of the Department of Homeland Security in investigating this matter. Assistant United States Attorney, Richard R. Pickens, II, of the Financial Crimes Unit is in charge of the prosecution.

The Fraud Section leads the Criminal Division's prosecution of fraud schemes that exploit the Paycheck Protection Program (PPP). Since the inception of the CARES Act, the Fraud Section has prosecuted over 150 defendants in more than 95 criminal cases and has seized over $75 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at Justice.gov/OPA/pr/justice-department-takes-action-against-covid-19-fraud.

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