Disbarred Attorney Sentenced to 9 Years in Prison for $1.4 Million EIDL Fraud – Fraud Friday

May 24, 2024

Delaney Sexton
Contributing Editor

Disbarred Attorney Sentenced to 9 Years in Prison for $1.4 Million EIDL Fraud – Fraud Friday

“Douglas Raymond Arntsen, a disbarred attorney and recidivist fraudster, took advantage of a national emergency to line his pockets, masterminding a scheme to defraud the government out of more than $1.4 million by submitting fraudulent COVID-19 relief loan applications.  Thanks to the hard work of this Office and our law enforcement partners, Arntsen is being held accountable for his fraud,” says U.S. Attorney Damian Williams.

During 2020, Arnsten recruited other individuals for his EIDL fraud scheme and promised them a way out of their difficult financial circumstances. All he needed was their personal information, such as social security and driver’s license numbers, to help. They trusted him because they believed he was an attorney, but he was actually disbarred. The information they gave him was used in fraudulent EIDL applications that claimed the individuals owned small businesses with substantial revenue. In reality, the individuals had no connection to the businesses whatsoever.

Once the loan applications were submitted, Arnsten directed his co-conspirators to lie to the SBA during the loan diligence process. He also ordered them to bring more individuals to him to participate in the scheme. After obtaining a loan, he told one co-conspirator to “[get him] one more warm body.” That co-conspirator brought the personal information of a relative, which was used to obtain another fraudulent loan.

Arnsten successfully obtained $1.4 million in fraudulent loans and attempted to obtain even more EIDLs that SBA declined. He texted one co-conspirator after receiving an approval, “Need how you want your bank checks. Your chariot has arrived this morning.”

In addition to the 9 years in prison, Arnsten was sentenced to three years of supervised release and must pay restitution and forfeiture of $1.43 million. The impactful sentence is likely due to his history of fraud. In 2012, Arnsten was a barred attorney, but he was convicted and sentenced to 4 to 12 years in prison for engaging in a multi-year scheme to steal more than $10 million in clients’ money from escrow accounts.

U.S. Attorney’s Office Press Release