New Orleans Man Sentenced to 5 Years of Probation for Cares Act Fraud, Money Laundering and False Tax Filing

Summary

A press release from USAO - Louisiana, Eastern published 2025-05-30, "New Orleans Man Sentenced to 5 Years of Probation for Cares Act Fraud, Money Laundering and False Tax Filing". It announces that U.S. District Judge Jane Triche-Milazzo sentenced Clifton C. James, age 50, of New Orleans, to 5 years of probation, 50 hours of community service, restitution of $551,973.00 to the SBA and $233,645.65 to the IRS. The release states, according to the charging documents, that on or about April 30, 2020 James made false statements to an approved lender to obtain a $86,800 PPP loan. It states that on or about July 13, 2020 James stole $149,900 from the SBA using a false application in the name of Crescent City Tax Services, LLC, and used the funds to buy an automobile. It states that James claimed to have earned $1.00 in a 2019 tax return.

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NEW ORLEANS –
Acting U.S. Attorney Michael M. Simpson announced that
CLIFTON C. JAMES (“JAMES”)
, age 50, of New Orleans, was sentenced today by U.S. District Judge Jane Triche-Milazzo to 5 years of probation for making false statements, theft of government funds, and money laundering related to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as well as making a false tax filing with the Internal Revenue Service.
On March 27, 2020, the President of the United States signed into law the CARES Act, which provided emergency assistance, administered by the United States Small Business Administration (SBA), to small business owners affected by the Coronavirus (COVID-19) pandemic.  The two primary sources of funding for small businesses were the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL) program.
According to the charging documents, or about April 30, 2020,
JAMES
,
on behalf of a business that he owned, made false statements to an approved lender to obtain a $86,800 PPP loan.  On or about July 13, 2020,
JAMES
stole $149,900 from the SBA by using a false application in the name of Crescent City Tax Services, LLC.
JAMES
then committed money laundering by using these ill-gotten funds to buy an automobile from a dealership in California.  Lastly,
JAMES
filed a false document with the Internal Revenue Service wherein he claimed to have earned $1.00 in a 2019 tax return.
In addition to probation,
JAMES
was ordered to perform 50 hours of community service and to pay restitution in the amount of $551,973.00 to the SBA along with restitution to the IRS in the total amount of $233,645.65.  There is also a mandatory $400 special assessment fee.
For more information on the Department of Justice’s response to the pandemic, please visit
https://www.justice.gov/coronavirus
.  Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at
https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
.
This case was investigated by an agent assigned to the Pandemic Response Accountability Committee (PRAC) Fraud Task Force.  The PRAC was established to serve the American public by promoting transparency and facilitating coordinated oversight of the federal government’s COVID-19 pandemic response.  The PRAC’s 21 member Inspectors General identify major risks that cross program and agency boundaries to detect fraud, waste, abuse, and mismanagement in the more than $5 trillion in COVID-19 spending.  The PRAC Fraud Task Force brings together agents from 15 Inspectors General to investigate fraud involving a variety of programs, including the Paycheck Protection Program.  Task force agents who are detailed to the PRAC receive expanded authority to investigate pandemic fraud as well as tools and training to support their investigations.
Acting U.S. Attorney Simpson praised the work of the U.S. Department of Veterans Affairs - Office of Inspector General (a member of the PRAC) and the Internal Revenue Service - Criminal Investigation in investigating this matter.  Assistant U.S. Attorney Edward J. Rivera of the Financial Crimes Unit was in charge of the prosecution.

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