AUSTIN, Texas - An Austin accountant was sentenced in federal court to 41 months in prison for money laundering and bank fraud that undermined the Paycheck Protection Program (PPP), announced U.S. Attorney Justin R. Simmons for the Western District of Texas.

According to court documents, between October 2023 and July 2024, Arun Mago, 47, laundered $150,000 in cash that he knew to be the proceeds of cocaine distribution. The investigation revealed that in addition to his money laundering activities, Mago also engaged in repeated loan fraud during the COVID-19 pandemic. From about April 4 to Nov. 23, 2021, Mago applied for and received several fraudulent PPP loans and Economic Injury Disaster Loans (EIDL) for several business entities totaling nearly $1 million. Bank records revealed that Mago transferred the funds into his personal bank account and used them for multiple real estate purchases.

"Arun Mago not only defrauded the United States government during the chaotic COVID-19 pandemic but continued down his criminal path to launder a substantial amount drug money," said U.S. Attorney Simmons. "Mago thought that he was untouchable and an expert fraudster, but now he knows otherwise. The Trump Administration has prioritized prosecuting fraudsters who steal from the American people, and the Western District of Texas has, once again, met that mission. This office and our federal law enforcement partners will always hold accountable those who steal from the American taxpayer and undermine our federal programs."

"Mago, who was a certified public accountant, wrote a book with a chapter titled 'Black Money' and claimed money laundering and tax evasion schemes were untraceable. I can only imagine his shock when we traced his more than $900,000 of COVID loan fraud and also got him on money laundering charges in an undercover operation," said Special Agent in Charge Christopher J. Altemus Jr., of IRS Criminal Investigation's Texas Field Office. "Money always leaves a trace and criminals always think they are smarter than law enforcement. You can earn certifications, you can write books, but, when you break the law, we write the final chapter by taking your money and your freedom."

In addition to the imprisonment, U.S. District Judge Robert Pitman ordered Mago to pay over $900,000 in restitution and a $250,000 fine.

IRS-CI and the Office of the Texas Attorney General investigated the case.

Assistant U.S. Attorney Keith Henneke prosecuted the case.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division ("Fraud Division"). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

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