HOUSTON, October 30 : An Indian-origin accountant in the United States has been sentenced to 41 months in federal prison for fraudulently obtaining nearly USD 1 million in COVID-19 relief funds and laundering money generated through cocaine trafficking.
Arun Mago was sentenced on Wednesday by US District Judge Robert Pitman in Austin after being convicted of bank fraud and money laundering.
The court also directed him to pay more than USD 900,000 in restitution and imposed an additional fine of USD 250,000.
According to court records, Mago laundered approximately USD 150,000 in cash generated through cocaine distribution between October 2023 and July 2024.
Investigators also found that he had orchestrated a fraudulent loan scheme during the COVID-19 pandemic, obtaining nearly USD 1 million through the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) across multiple business entities.
These federal assistance programmes were introduced to help businesses survive the economic disruption caused by the pandemic.
However, instead of using the funds for employee salaries or legitimate business expenses, Mago transferred the money into his personal bank accounts and diverted it towards purchasing real estate.
Officials also highlighted that Mago had previously written a book containing a chapter titled 'Black Money', in which he claimed that money laundering and tax evasion schemes were virtually impossible to trace.
US Attorney Justin R Simmons for the Western District of Texas said Mago had exploited federal assistance programmes during the pandemic and subsequently continued his illegal activities by laundering substantial amounts of money linked to drug trafficking.
The sentencing followed Mago's guilty plea earlier this year and concluded a joint investigation conducted by the Texas Field Office of IRS Criminal Investigation and the Office of the Texas Attorney General.
