Western District of Texas U.S. Attorney’s Office Joins DOJ Fraud Division in Surge Takedown Exceeding $245 Million in COVID-era Loan Fraud

Press release — Western District of Texas U.S. Attorney’s Office Joins DOJ Fraud Division in Surge Takedown Exceeding $245 Million in COVID-era Loan Fraud, dated 2026-09-15, issued by U.S. Attorney’s Office, Western District of Texas.

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{"metadata":{"responseInfo":{"status":200},"resultset":{"count":"1","pagesize":20,"page":0},"executionTime":0.0038170814514160156},"results":[{"attachment":"","body":"SAN ANTONIO \u2013 The United States Attorney\u2019s Office for the Western District of Texas today announced its role in a nationwide enforcement action led by the Justice Department\u2019s National Fraud Enforcement Division, the Small Business Administration, and the SBA Office of Inspector General targeting fraud in the SBA\u2019s Paycheck Protection Program (PPP). The Western District of Texas was a key participant in this surge effort.\u0026nbsp;From June 12 to Sept. 1, federal prosecutors across the country facilitated fraud enforcement actions spanning over 160 criminal defendants, including approximately 80 newly charged defendants, reaching approximately $245 million dollars in intended loss to American taxpayers.\u0026nbsp;\u201cSix years after our first PPP fraud case was charged in Austin, we are still finding fraudsters and holding them accountable for their greed-driven schemes that undermined a federal program and stole from American taxpayers in the midst of the chaos that was the COVID-19 pandemic,\u201d said U.S. Attorney Justin R. Simmons for the Western District of Texas. \u201cThis surge, led by the National Fraud Enforcement Division, highlights our commitment to protecting the integrity of our government programs and ensuring no one gets away with defrauding the public.\u201d\u201cPandemic loan relief was meant to keep American small businesses alive during government lockdowns\u2014not line the pockets of fraudsters,\u201d said Attorney General Todd Blanche. \u201cThe defendants charged during our summer surge allegedly fabricated businesses, submitted false payroll and revenue claims, stole identities, and concealed foreign ties on their applications\u2014 but they will now be prosecuted to the fullest extent of the law.\u201d\u0026nbsp;\u201cThis summer surge shows what is possible when dedicated public servants across the country work together with a single purpose,\u201d said Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division. \u201cOur mission is clear: protect taxpayer funds, safeguard the integrity of federal relief programs, and deliver justice to those who exploited them. We will remain steadfast every day\u2014standing shoulder-to-shoulder with our partners\u2014to identify fraud, pursue those responsible, and restore con\ufb01dence in the programs meant to help American small businesses thrive.\u201d\u201cToday\u2019s announcement represents the largest-ever action against perpetrators of SBA fraud, with 870,000 suspended borrowers tied to $39 billion in suspected fraudulent PPP and COVID EIDL activity. In partnership with Vice President Vance and the White House Task Force to Eliminate Fraud, we\u2019re putting fraudsters on notice: the federal government will no longer turn a blind eye to those who stole from taxpayers and exploited programs designed to sustain small businesses during the pandemic,\u201d said SBA Administrator Kelly Loeffler. \u201cWith demand letters going out to suspected fraudsters, we\u2019re also sending a clear message that they must repay their debts or face Treasury collections and possible federal law enforcement. Under this Administration, the free ride is over. We are restoring accountability, recovering taxpayer dollars, and protecting SBA programs for the legitimate small businesses they were created to serve.\u201d\u0026nbsp;\u201cOperation No Doze brings a focused and coordinated approach to pursuing fraud in SBA\u2019s pandemic relief programs,\u201d said SBA Inspector General William Kirk. \u201cBy concentrating our investigative resources and working closely with SBA and our law enforcement partners, we are strengthening our ability to identify fraud, recover taxpayer funds, and hold accountable those who exploited programs created to help small businesses in a time of extraordinary need. This initiative makes clear that the passage of time does not diminish our commitment to accountability.\u201d\u0026nbsp;In the Western District of Texas, U.S. Attorney Justin R. Simmons announced that two defendants pleaded guilty in two separate PPP-related fraud cases involving approximately a combined $1.2 million in alleged losses.\u0026nbsp;According to court documents, Arun Mago was an accountant in Austin and a known money launderer. Mago laundered $150,000 in cash represented by an undercover agent to be the proceeds of cocaine distribution. In addition to his money laundering activities, he also engaged in repeated loan fraud during the pandemic, applying for and receiving several fraudulent PPP loans for several business entities totaling $905,264. Mago pleaded guilty in July. IRS-CI investigated the case.\u0026nbsp;In a separate case, Eve Zou, an employee of the Texas Department of Family and Protective Services, made false and fraudulent promises and representations to the Small Business Administration (SBA) to obtain Economic Injury Disaster Loans (EIDL) and grants that were purportedly for legitimate business purposes, but, in truth and fact, the loan proceeds were used by Zou for her own personal use and benefit, including the purchase of real estate and for investment in brokerage accounts. Zou also made multiple false statements in those loans, including using her daughter\u2019s identity without her daughter\u2019s knowledge or permission, falsely claiming to have 50 employees, and falsely claiming lost rental income. She fraudulently obtained three SBA loans, for a combined total of $319,800. Zou also pleaded guilty. IRS-CI investigated the case.On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (\u201cFraud Division\u201d). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department\u2019s work to combat fraud supports President Trump\u2019s 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 bene\ufb01t programs.\u0026nbsp;An indictment, information, or complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.###","changed":"\u003Ctime datetime=\u00222026-09-15T08:43:07-04:00\u0022\u003E1789476187\u003C\/time\u003E\n","component":[{"uuid":"d50b78df-a13b-4519-9b32-00aae6e21409","name":"National Fraud Enforcement Division"},{"uuid":"35710eb4-518a-47cd-84da-e8bb304010b4","name":"USAO - Texas, Western"}],"created":"\u003Ctime datetime=\u00222026-09-15T08:38:14-04:00\u0022\u003E1789475894\u003C\/time\u003E\n","date":"1789473600","image":"","number":"","teaser":"\u003Cp\u003EFrom June 12 to Sept. 1, federal prosecutors across the country facilitated fraud enforcement actions spanning over 160 criminal defendants, including approximately 80 newly charged defendants, reaching approximately $245 million dollars in intended loss to American taxpayers.\u003C\/p\u003E","title":"Western District of Texas U.S. Attorney\u2019s Office Joins DOJ Fraud Division in Surge Takedown Exceeding $245 Million in COVID-era Loan Fraud ","topic":[{"uuid":"32b4d47b-2142-420c-9aae-28f7bf2c86d4","name":"Fraud"},{"uuid":"6827a162-b783-4ffa-a6c2-596fc9f07e39","name":"COVID-Related Fraud"},{"uuid":"77a2d846-a826-49db-a31a-c5db747e9ad3","name":"Financial Fraud"}],"url":"https:\/\/www.justice.gov\/usao-wdtx\/pr\/western-district-texas-us-attorneys-office-joins-doj-fraud-division-surge-takedown","uuid":"b4926700-2160-4268-9827-1f03cf844bd1"}]}

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