Dallas Tax Consultant Pleads Guilty to Stealing $23 Million in Federal Pandemic Aid

Acting U.S. Attorney Chad Meacham for the Northern District of Texas announced that a Dallas tax consultant, Steven Jalloul, pleaded guilty to orchestrating a multi-million dollar scheme to defraud the Paycheck Protection Program (PPP) and obtained over $23 million in forgivable loans meant for struggling small businesses.

Charges Against Steven Jalloul

Jalloul, a Liberian national, was first charged via criminal complaint in September 2020 and later indicted in the same month. He pleaded guilty to engaging in monetary transactions using property derived from unlawful activity.

Fraudulent Activities by Jalloul

Amidst awaiting sentencing in a separate tax fraud case, Jalloul defrauded several PPP lenders from July to August 2020. He submitted over 170 fraudulent applications, on behalf of more than 160 clients of his tax preparation business, Royalty Tax & Financial Services LLC.

Bogus Applications

Jalloul falsified payroll records and employee numbers to deceive lenders into approving 97 bogus applications totaling over $12 million in pandemic aid.

Inflated PPP Loan

In his attempt to secure an inflated PPP loan for his own business, Jalloul named his ex-wife as Royalty Tax’s authorized representative without her consent.

Sentencing and Penalties

Under U.S. law, Jalloul is facing up to 10 years in prison for the PPP fraud, separate from the six-year sentence he received in the tax fraud case. His sentencing date for the PPP fraud case has not been announced yet.

Investigation and Prosecution

Federal Deposit Insurance Corporation, Office of Inspector General, and the Internal Revenue Service, Criminal Investigation were among the organizations that investigated this case. Assistant U.S. Attorneys Fabio Leonardi, Marty Basu, and Dimitri Rocha are handling the prosecution.

Background on the Paycheck Protection Program (PPP)

The Paycheck Protection Program (PPP) is an initiative authorized under the CARES Act in March 2020, offering small businesses low-interest, forgivable loans to help cover expenses such as payroll and rent during the pandemic.

The PPP provides loans with a maturity of two years and an interest rate of 1%, with both the interest and principal eligible for forgiveness if the business spends the funds on qualifying expenses within a specified timeframe.