Austin Accountant Gets 41 Months in Prison for PPP Fraud and Money Laundering

Quick Summary: Austin accountant Arun Mago, 47, has been sentenced to 41 months in federal prison for bank fraud involving COVID-era business loans and a separate money laundering scheme.

From Pandemic Loan Fraud to Federal Prison

An Austin, Texas accountant who fraudulently obtained more than $900,000 in COVID-era business loans has been sentenced to nearly three and a half years in federal prison, bringing another pandemic fraud prosecution to a close more than five years after the loans were issued.

Arun Mago, 47, received a 41-month prison sentence for bank fraud and money laundering, according to an October 28, 2026, announcement from the U.S. Attorney's Office for the Western District of Texas.

Federal investigators determined that between April and November 2021, Mago submitted fraudulent applications for Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) involving multiple business entities. The proceeds, totaling more than $900,000, were transferred into his personal bank account and used for real estate purchases.

The PPP program was created under the Trump administration in 2020 to quickly distribute forgivable loans to businesses during the COVID-19 emergency. The speed of its rollout, combined with limited upfront verification, created opportunities for fraud that federal investigators have continued pursuing since 2021.

A Separate Money Laundering Scheme

The PPP fraud was only one part of his criminal activity.

According to federal prosecutors, between October 2023 and July 2024, Mago laundered $150,000 in cash that he understood to be proceeds from cocaine distribution.

The Justice Department said investigators uncovered his pandemic loan fraud in addition to the money laundering activity. IRS Criminal Investigation also described an undercover operation that produced the laundering charges.

In another striking detail, investigators said Mago had written a book containing a chapter titled Black Money, in which he claimed that money laundering and tax evasion methods could escape detection.

U.S. District Judge Robert Pitman ordered Mago to serve 41 months in prison, pay more than $900,000 in restitution, and pay an additional $250,000 fine.

COVID Loan Fraud Prosecutions Continue

Mago's sentencing is part of the continuing effort to prosecute fraud involving the PPP and EIDL programs. His case also highlights how financial investigations can uncover separate offenses first, i.e., money laundering, and then discover the PPP fraud.