A New Orleans man has admitted he lied his way into more than $700,000 in pandemic relief, pleading guilty this week to falsifying a COVID-era small-business loan application that federal prosecutors say drained roughly $712,212.84 from government programs.
Arthur Allen, 53, acknowledged making false statements on the application and now heads toward a summer sentencing date that could bring serious federal penalties.
According to a press release from the U.S. Attorney’s Office, Eastern District of Louisiana, Allen pleaded guilty last Wednesday to providing a false statement to a federal agency. Sentencing is scheduled for July 28, 2026, before U.S. District Judge Jay C. Zainey.
Prosecutors say Allen filed the loan application on May 7, 2020, claiming his bed-and-breakfast business racked up more than $425,000 in gross receipts in 2019 and that he had deducted and paid payroll taxes for employees that year. Bank records reviewed in the investigation allegedly told a very different story, showing no receipts and no payroll for 2019. Investigators put the loss to the relief programs at about $712,212.84, as reported by WGNO.
How this case fits a wider pattern
Federal watchdogs have seen this movie plenty of times during the pandemic era. Inflated payrolls, phantom employees and padded revenue numbers became a go-to playbook for scammers trying to tap into emergency aid.
Allen’s case fits that broader pattern, with investigators alleging he invented revenue and payroll on paper that never showed up in the bank. As tracked on Pandemic Oversight, federal investigators and inspectors general have been chasing down fraud tied to Paycheck Protection Program and Economic Injury Disaster Loan funds, along with pandemic-era unemployment insurance, since 2020.
Legal next steps
Allen faces a statutory maximum of five years in prison, a fine of up to $250,000, a mandatory $100 special assessment and up to three years of supervised release, according to court documents and local reporting. Assistant U.S. Attorney Richard R. Pickens II of the Financial Crimes Unit is prosecuting the case, and authorities say they will ask the court to hold Allen financially responsible for the loss to the relief program, per WGNO.
U.S. Attorney David I. Courcelle praised the investigators on the case and noted that it comes as federal authorities ramp up efforts to root out COVID-era fraud, including the Justice Department’s creation of a National Fraud Enforcement Division, according to the U.S. Attorney’s Office, Eastern District of Louisiana. The office credited the Department of Homeland Security with investigative work and listed the Eastern District’s Financial Crimes Unit as handling the prosecution.
