Paramus Man Sentenced to 20 Months in Federal Prison for COVID-19 Loan Fraud

George Leguen illegally obtained nearly $150,000 in pandemic relief funds and diverted the money for personal use.

NEWARK — A Paramus resident was sentenced to 20 months in federal prison for fraudulently acquiring nearly $150,000 in pandemic relief funds through the federal Economic Injury Disaster Loan (EIDL) program. The sentencing was announced by U.S. Attorney Alina Habba and handed down by U.S. District Judge Madeline Cox Arleo in Newark federal court.

George Leguen, 51, pleaded guilty to wire fraud and money laundering, admitting that he submitted falsified business information and forged tax documents to obtain an EIDL loan meant to support small businesses during the COVID-19 public health emergency. The fraudulent application led to the approval and disbursement of a $149,900 loan from the Small Business Administration (SBA).

According to court documents and statements made during the proceedings, the fraudulent activity occurred between August 2020 and January 2021. Leguen applied on behalf of a business he owned, exaggerating employee numbers and revenue figures, and submitting fabricated federal tax returns. He then used the funds for personal expenses, not for any legitimate business purpose.

In addition to the prison sentence, Judge Arleo ordered Leguen to serve three years of supervised release and pay $174,426.37 in restitution, along with forfeiting the full loan amount of $149,900.

The case was investigated by multiple federal agencies, including:

• IRS Criminal Investigation, Newark Field Office,

• Drug Enforcement Administration (DEA), New Jersey Field Division,

• U.S. Secret Service, Newark Field Office,

• U.S. Department of Labor – Office of Inspector General.

This prosecution is part of the District of New Jersey COVID-19 Fraud Enforcement Strike Force, a DOJ initiative targeting large-scale pandemic relief fraud nationwide. The effort combines multiple federal agencies in data-driven investigations aimed at holding individuals accountable for misusing federal emergency funding.

The case was prosecuted by Assistant U.S. Attorney Fatime Meka Cano of the Economic Crimes Unit in Newark.

The U.S. Department of Justice continues to encourage the public to report suspected pandemic relief fraud to the National Center for Disaster Fraud at 866-720-5721 or online at justice.gov/disaster-fraud.