Indian-Origin Accountant Jailed for 41 Months in US COVID Relief Fraud

Houston: An Indian-origin man in the US has been sentenced to 41 months in federal prison for fraudulent acquisition of pandemic-era relief funds and laundering cash derived from drug trafficking.

Arun Mago, an accountant, was sentenced on Wednesday by US District Judge Robert Pitman in Austin following his conviction on charges of bank fraud and money laundering.

The court also ordered Mago to pay over USD 900,000 in restitution and imposed a USD 250,000 fine.

According to court records, Mago laundered USD 150,000 in cash derived from cocaine distribution between October 2023 and July 2024.

Alongside these illicit transfers, Mago orchestrated a loan fraud scheme during the COVID-19 pandemic, receiving nearly USD 1 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) across several business entities.

Instead of utilising the emergency funds to sustain employee payroll or cover legitimate business operating expenses, Mago transferred the capital into his personal bank accounts and diverted it toward real estate purchases.

Officials noted that Mago had previously authored a book containing a chapter titled 'Black Money', in which he claimed that money laundering and tax evasion schemes were completely untraceable.

US Attorney Justin R Simmons for the Western District of Texas stated that Mago not only defrauded the federal government during the pandemic but continued his criminal activity by laundering substantial amounts of drug money.

The sentencing follows a guilty plea entered by Mago earlier this year, concluding a joint investigation by IRS Criminal Investigation's Texas Field Office and the Office of the Texas Attorney General.