North Texas tax consultant sentenced for $23M COVID Relief Fraud

DALLAS (CBSDFW.COM) - A Liberian national who orchestrated a fraudulent scheme involving more than $23 million in Paycheck Protection Program (PPP) loans has been sentenced to 10 years in federal prison.

Steven Jalloul, a 43-year-old North Texas tax consultant, was first charged via criminal complaint in 2020; he pleaded guilty in October 2021 to a superseding information charging him with one count of engaging in monetary transactions using property derived from unlawful activity.

"Mr. Jalloul callously exploited the Paycheck Protection Program, which was designed to keep struggling businesses afloat during the pandemic. He took money out of the hands of businesspeople who truly needed it," said U.S. Attorney Chad E. Meacham.

According to plea papers, Jalloul admitted he defrauded lenders participating in the PPP - a measure authorized by Congress in the early days of the pandemic to award forgivable loans to small business impacted by COVID-19 - while awaiting sentencing in a separate tax fraud case.

In court documents, he admitted to submitting some 170 falsified loan applications to lenders seeking more than $23 million on behalf of over 160 clients of his tax preparation business, Royalty Tax & Financial Services LLC.

Jalloul admitted he inflated clients' employee rosters and monthly payroll expenses in order to increase the amount of PPP funds for which their businesses would be eligible. He generally charged clients a 2 to 20-percent commission on the PPP loans they received and even listed his ex-wife as Royalty Tax's authorized representative, without her consent, when seeking an inflated PPP loan for his own business.

In all, 97 false PPP loan applications were ultimately approved, and Jalloul's clients were awarded more than $12 million. Those clients paid him at least $972,000 in fees. Jalloul also admitted to submitting a fraudulent PPP loan application on behalf of his tax preparer company and received $163,500 in PPP funds.

Jalloul was already behind bars in Seagoville, having pleaded guilty to tax fraud in the separate case in January 2020; in that case, he was sentenced to six years in federal prison. A judge ruled that he will serve his sentence his sentences consecutively.