New Orleans Businessman Guilty of Covid-19 Relief Fraud Totaling Approximately $712,212.84

Summary

A press release published April 29, 2026 reports that Arthur Allen of New Orleans pleaded guilty on April 22, 2026, before Judge Jay C. Zainey to providing a false statement to a federal agency. According to court documents, on or about May 7, 2020, Allen provided a materially false statement to the Small Business Administration in a loan application, claiming that his bed and breakfast company had over $425,000 in gross receipts and revenue in 2019. The release says an investigation of bank records showed no receipts or revenue in 2019, and it states a total loss of approximately $712,212.84. Sentencing is set for July 28, 2026.

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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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