$7m Covid-relief loan scam: ICO fraudster pleads guilty

$7m Covid-relief loan scam: ICO fraudster pleads guilty

Misleading investors in a fraudulent initial coin offering during 2018 and acquiring more than $7 million in Covid-19 relief through fraudulent loan applications, a 24-year-old New York resident has pleaded guilty

A series of online  loan applications accompanied by forged tax and payroll records was submitted between May and August of last year, by a Taiwanese national, Justin Cheng, also known as Justin Jung, as reported by U.S Department of Justice.

Two hundred employee’s names purporting to be earning $1.5 milllion in monthly wages from Cheng’s business was among the things in the application of Cheng to IRS tax and payroll records. Good Morning America co-anchor and the dead former Penn State football Coach, were the names of current and former public figures contained in the list.

In addition to applying with at least five different banks, the scammer sent loan applications to the U.S. government’s Paycheck Protection Program and Economic Injury Disaster Loan programs.”

Cheng was successful in securing $7 million worth of covid-relief for his fictitious employees, which was reportedly spent on personal expenses including a $40,000 Rolex, rent for a $17,000 a month apartment, and 2020 Mercedes. U.S. Attorney Audrey Strauss said:

“Cheng lied to the SBA and several banks about ownership of his companies, the number of people employed, and how any loan proceeds would be applied, using forged and fraudulent documents in the process. Cheng spent much of the money on personal luxury items.”

The self-described “serial entrepreneur” also plead guilty to operating a fraudulent ICO between August and October 2018 for his firm.

 

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