Liberian National, Steven Jalloul, Admits to $23 Million PPP Fraud in North Texas Court

Acting U.S. Attorney Chad Meacham announced that a Liberian national, Steven Jalloul, pleaded guilty in the U.S. North District Texas court for defrauding financial institutions participating in the Paycheck Protection Program (PPP) to the tune of over $23 million.

Indictment and Plea

Jalloul, aged 43, of the Dallas area, was initially indicted in September 2020, following a criminal complaint, for one count of engaging in monetary transactions using property derived from unlawful activity. He pleaded guilty on Tuesday to this charge as part of a superseding information.

Designated Program to Aid Small Businesses

The Paycheck Protection Program was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law passed on March 29, 2020. The program’s primary goal was to provide emergency financial assistance to American citizens affected by the COVID-19 pandemic. It initially allocated up to $349 billion for forgivable loans to eligible small businesses to support payroll costs and other expenses, such as rent. In April 2020, Congress authorized an additional more than $300 billion in PPP funding.

Fraudulent Actions

According to court documents, Jalloul admitted that he submitted approximately 170 falsified PPP loan applications on behalf of over 160 clients from his tax preparation business, Royalty Tax & Financial Services LLC. He deceptively inflated clients’ employee rosters and monthly payroll expenses to secure eligibility for PPP funds, collecting commissions ranging from 2 to 20 percent for his services. Furthermore, he even listed his ex-wife as Royalty Tax’s authorized representative for a loan application to secure an inflated PPP loan for his own business.

Financial Consequences

Of the 97 false PPP loan applications approved, more than $12 million was distributed to Jalloul’s clients, leading to over $972,114 in fees for his services. However, he now faces up to 10 years in federal prison for the PPP fraud, with his sentencing date yet to be set.

Criminal History

Jalloul is already incarcerated at the Federal Correctional Institution-Seagoville upon pleading guilty to tax fraud in a separate case in January 2020 and receiving a six-year federal prison sentence.

Collaborating Agencies

The Dallas offices of the Federal Deposit Insurance Corporation, Office of Inspector General, and the Internal Revenue Service, Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Fabio Leonardi and Marty Basu are prosecuting the case, while Assistant U.S. Attorney Dimitri Rocha manages the asset-forfeiture component.