Atlanta, GA – In a stark reminder of the pervasive fraud that plagued COVID-19 relief programs, two Georgia men, Johnny Narcisse and his cousin Johnson Dieujuste, have been sentenced to federal prison for their roles in a sophisticated scheme that defrauded the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program of more than $2 million. The case highlights the vulnerability of emergency relief funds and the ongoing efforts of law enforcement to bring perpetrators of pandemic-related fraud to justice.
This article delves into the details of Narcisse and Dieujuste’s fraudulent activities, their convictions, and the broader context of COVID-19 relief fraud. It also explores the role of various government agencies in investigating and prosecuting such crimes, and provides information on how the public can report suspected fraud.
The Scheme: Exploiting Vulnerabilities in COVID-19 Relief Programs
The COVID-19 pandemic triggered an unprecedented economic crisis, prompting the U.S. government to launch massive relief programs aimed at mitigating the financial fallout. The PPP and EIDL programs were central to this effort, designed to provide forgivable loans to small businesses struggling to stay afloat and cover essential expenses like payroll, rent, and utilities.
However, the speed and scale at which these programs were rolled out created opportunities for unscrupulous individuals to exploit vulnerabilities in the system. Johnny Narcisse and Johnson Dieujuste were among those who seized this opportunity, devising a scheme that ultimately defrauded taxpayers of over $2 million.
How the Fraud Unfolded: A Detailed Look at Narcisse and Dieujuste’s Tactics
According to court documents and statements made by Acting U.S. Attorney Richard S. Moultrie, Jr., the investigation into Narcisse began in July 2021 when federal agents, initially investigating a Florida resident for suspected tax crimes, obtained a search warrant for Narcisse’s Georgia home, computer, and cellular phone. This search yielded a trove of evidence revealing a complex conspiracy between Narcisse and Dieujuste.
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The cousins’ scheme involved recruiting small business owners and then filing fraudulent applications for PPP and EIDL loans on their behalf. The process was deceptively simple:
- Recruitment: Narcisse and Dieujuste would approach small business owners, promising to help them secure COVID-19 relief funds.
- Information Gathering: They would collect the business owners’ names, business names, and Employer Identification Numbers (EINs).
- Fabrication: The rest of the information required for the loan applications was simply invented. Narcisse and Dieujuste fabricated details about the businesses’ revenue, expenses, and number of employees to make them appear eligible for the loans.
- Submission: The fraudulent applications were then submitted to the Small Business Administration (SBA) and participating lenders.
- Kickbacks: If a loan was approved and disbursed, the borrowers would kick back a percentage of the proceeds to Narcisse and/or Dieujuste as payment for their “services.”
This scheme was replicated dozens of times, resulting in over $2 million in fraudulent loans being disbursed.
Beyond the Conspiracy: Individual Fraudulent Loan Applications
In addition to their scheme to defraud the PPP and EIDL programs on behalf of others, Narcisse and Dieujuste also filed fraudulent loan applications for themselves. These individual applications, which were uncovered during the investigation, added to the total loss amount and were factored into their sentencing and restitution orders.
The Investigation: Unraveling the Fraudulent Web
The investigation into Narcisse and Dieujuste’s activities was a collaborative effort led by the U.S. Treasury Inspector General for Tax Administration (TIGTA) and the Small Business Administration’s Office of Inspector General (SBA-OIG). These agencies played a crucial role in identifying the fraudulent loan applications, tracing the flow of funds, and gathering the evidence necessary to build a strong case against the defendants.
The initial search warrant executed at Narcisse’s home proved to be a turning point in the investigation. The digital evidence found on his computer and phone provided a detailed record of their communications, the fraudulent loan applications, and the financial transactions associated with the scheme.
Legal Proceedings: Guilty Pleas and Sentencing
Faced with the overwhelming evidence against them, both Narcisse and Dieujuste pleaded guilty to one count each of conspiracy to commit wire fraud. This guilty plea, a federal felony, carry a maximum penalty of 20 years, as well as a fine of not more than the greater of $250,000 or twice the gross gain or loss from the offense.
Johnny Narcisse’s Sentencing:
On October 21, 2024, U.S. District Judge Eleanor L. Ross sentenced Johnny Narcisse, 46, of Atlanta, Georgia, to two years and four months in prison, followed by three years of supervised release. He was also ordered to pay restitution in the amount of $2,000,332, reflecting the total losses attributed to his involvement in the scheme.
Johnson Dieujuste’s Sentencing:
Johnson Dieujuste, 37, of Loganville, Georgia, received his sentence on January 8, 2025. Judge Ross sentenced him to two years and eight months in prison, also followed by three years of supervised release. Dieujuste was ordered to pay restitution in the amount of $2,081,559.
The Role of the COVID-19 Fraud Enforcement Task Force
The prosecution of Narcisse and Dieujuste is part of a broader effort to combat pandemic-related fraud. On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force, a multi-agency initiative aimed at marshaling resources and expertise to investigate and prosecute individuals and organizations involved in COVID-19 relief fraud.
The Task Force has been instrumental in:
- Enhancing investigative and prosecutorial efforts: By bringing together resources and expertise from various agencies, the Task Force has strengthened the government’s ability to identify and prosecute complex fraud schemes.
- Improving coordination: The Task Force has fostered greater collaboration between federal agencies, state and local law enforcement, and private sector partners.
- Sharing information and best practices: The Task Force facilitates the exchange of information and intelligence, allowing agencies to learn from past enforcement efforts and adapt their strategies accordingly.
- Preventing future fraud: By analyzing patterns and trends in pandemic-related fraud, the Task Force is working to identify vulnerabilities in relief programs and develop strategies to prevent future exploitation.
The Broader Context: The Scope of COVID-19 Relief Fraud
The case of Narcisse and Dieujuste is just one example of the widespread fraud that has plagued COVID-19 relief programs. While the vast majority of the trillions of dollars in aid were distributed legitimately, a significant portion was lost to fraud, waste, and abuse.
The Scope of the Problem:
Estimates of the total amount of fraudulent COVID-19 relief funds vary widely, but it is undoubtedly in the billions, if not tens of billions, of dollars. The SBA-OIG, in a 2023 report, estimated that as much as $200 billion may have been lost to fraud in the PPP and EIDL programs alone.
Types of Fraud:
COVID-19 relief fraud has taken many forms, including:
- Identity theft: Fraudsters used stolen identities to apply for loans in the names of unsuspecting individuals.
- Business identity theft: Similar to identity theft, but involving the use of stolen business information.
- Loan stacking: Applicants applied for multiple loans from different lenders, often using the same fabricated information.
- Inflated payroll or revenue: Businesses exaggerated their payroll or revenue figures to qualify for larger loans.
- Shell companies: Fraudsters created fake businesses with no legitimate operations to apply for loans.
- Misuse of funds: Some businesses received loans but used the funds for purposes other than those allowed under the programs.
Consequences of Fraud:
The consequences of COVID-19 relief fraud are far-reaching:
- Financial losses to taxpayers: Fraudulent loans represent a direct loss to taxpayers, who ultimately bear the cost of these programs.
- Undermining public trust: Fraud erodes public trust in government programs and institutions.
- Distorting the economy: Fraudulent loans can distort the economy by providing an unfair advantage to those who engaged in illicit activities.
- Diverting resources from legitimate recipients: Fraudulent claims can deplete the funds available for legitimate businesses and individuals in need.
Reporting Suspected COVID-19 Fraud
The Department of Justice encourages anyone with information about allegations of attempted fraud involving COVID-19 to report it. You can do so by:
- Calling the National Center for Disaster Fraud (NCDF) Hotline: 866-720-5721
- Submitting a complaint online: https://www.justice.gov/…complaint-form
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