Baton Rouge Woman Sentenced to 48 Months in Federal Prison for Defrauding the PPP and EIDL Loan Programs and Laundering the Fraudulent Proceeds
United States Attorney Ronald C. Gathe, Jr. announced that Chief U.S. Judge Shelly D. Dick sentenced April R. Falgoust, age 46, of Prairieville, Louisiana, to 18 months in federal prison following her conviction for wire fraud. The Court also sentenced Falgoust to serve three years of supervised release following her term of imprisonment, ordered her to pay $147,925.69 in restitution to the United States Small Business Administration, and further ordered her to forfeit an additional $143,800 in proceeds from her crime.
Today’s sentence stems from a series of ongoing investigations into fraud schemes targeting COVID-19 relief funds made available under the CARES Act, including fraud schemes targeting Economic Injury Disaster Loan (EIDL) funds, Paycheck Protection Program (PPP) funds, and other benefits intended to help people and businesses suffering from the economic effects of the pandemic.
In this case, as Falgoust admitted in connection with her guilty plea, she devised a scheme to defraud the U.S. Small Business Administration by filing numerous false and fraudulent applications for EIDL funds. Specifically, between March 31, 2020 and May 8, 2020, Falgoust filed five fraudulent applications, in the names of the following companies: “LA Fitness & Tan, LLC,” “FalgouStrong Fitness, LLC,” “Boss Lady Suits,” “Forever the Baddest Makeup,” and “Hemphire Seed & Nutrients.” In the applications, she misrepresented the companies’ gross revenues, their costs, their number of employees, and the extent to which the companies had been affected by the pandemic, among other misrepresentations. Based on the defendant’s fraudulent representations, the SBA disbursed approximately $143,800 to the defendant, and the intended loss, including potential loss from fraudulent applications that the defendant submitted but that the SBA did not fund, was approximately $473,000.
U.S. Attorney Ronald C. Gathe, Jr., who is also the National Center for Disaster Fraud’s Executive Director, stated, “Preventing and prosecuting fraud is a priority of the Department of Justice, and this sentence should serve as a warning to those who would commit such crimes that we will bring offenders to justice and punish those who break the law. I applaud the efforts of our prosecutors and law enforcement partners the in the prosecution and conviction of this defendant.”
“Today’s sentencing should serve as a reminder to those who deceive and steal from hardworking Americans that they will be held to account for their actions. The FBI and its partners will continue to hold accountable those like Ms. April Falgoust who perpetrate fraud schemes at the expense of the American people,” said FBI New Orleans Special Agent in Charge Douglas A. Williams, Jr. “We thank our partners at United States Attorney's Office for the Middle District of Louisiana, Internal Revenue Service and the Small Business Administration Office of Inspector General for their strong partnership and unrelenting pursuit of justice.”
“The Treasury Inspector General for Tax Administration (TIGTA) will aggressively pursue those who use Internal Revenue Service (IRS) systems to facilitate their schemes to defraud pandemic relief programs,” said J. Russell George, the Treasury Inspector General for Tax Administration. “Fraudulent schemes such as this undermine the integrity of IRS programs and operations. We would like to thank the FBI, the SBA Office of the Inspector General and the US Attorney’s Office for their continued partnership in combating pandemic fraud.”
This matter was investigated by the Federal Bureau of Investigation, the United States Treasury Inspector General for Tax Administration (TIGTA), and the United States Small Business Administration—Office of Inspector General (SBA-OIG), and prosecuted by Assistant United States Attorney Alan Stevens, who serves as Senior Litigation Counsel for the United States Attorney’s Office.
Members of the public are reminded to be extremely cautious before providing personal identifying or financial information to anyone, especially those who may contact you after a natural disaster. They are also reminded to report suspected waste, fraud, abuse, or allegations of criminal conduct. If members of the public believe they have been the victim of fraud from a person or organization soliciting relief funds on behalf of disaster victims, they are strongly encouraged to contact the National Center for Disaster Fraud Hotline toll free by phone at (866) 720-5721, email at firstname.lastname@example.org, or fax at (225) 334-4707. The telephone line is staffed by live operators 24 hours a day, seven days a week.