New York, US Attorney Aure Strauss announced today that sheNG-WEN CHENG, a / k / a “Justin Cheng”, a / k / a “Justin Jung” has been sentenced to 72 months in prison. He has been involved in a number of fraudulent schemes. In particular, CHENG has been involved in fraudulent schemes of over $ 7 million in government-sponsored loans designed to provide relief to small businesses during the COVID-19 epidemic. CHENG has also sought and acquired investments in material fraud and misrepresentation by Alchemy Coin Technology Limited and related companies controlled by CHENG. Finally, as part of the prepaid program, CHENG obtained fraudulent payments from dozens of start-up companies. The change came before U.S. District Judge Allison J. Nathan today.
U.S. Attorney Aurry Strauss said, “Heng-wen Cheng has fraudulently claimed more than $ 7 million in government-sponsored loans for small businesses affected by the COVID epidemic. In addition, Cheng participated in the prepayment program and lied to investors in the blockchain-based peer-to-peer lending platform and wire fraud. Cheng is now sentenced to prison for a number of crimes. ”
Based on complaints, information and other documents filed by the Manhattan Federal Court
CARES is a federal law designed to provide emergency financial assistance to millions of Americans affected by the COVID-19 pandemic. . One source of assistance provided by CARES is the provision of hundreds of dollars in pardons through the SBA Payment Check Protection Program (PPP) for small businesses and other expenses. Under the CARES law, the amount of PPP that a business is eligible to receive depends on the number of employees employed in the business and their average wage. CARES has expanded the EIDL, a program that provides small business loans to small businesses to offset the temporary loss of income due to COVID-19.
CHENG, a Taiwanese citizen who came to the United States on a student visa, was a self-employed “series entrepreneur” who studied at Pennsylvania State University (“Penn State”). By at least April 2020 or at least August 13, 2020, CHENG has used the identities of others to submit online applications to the SBA and at least five financial institutions in total over $ 7 million in government guarantees. Loans through several companies controlled by CHENG, including SBA’s PPP and EIDL program, such as Alchemy Finance, Inc., Alchemy Insurance L.C. LLC, and Neo Belum Industries Inc. (Collectively, “Cheng Companies”). In connection with these loan applications, CHENG, among other things, claims that Cheng companies are the sole owners and that Cheng companies have more than 200 employees and a total salary of approximately $ 1.5 million. Monthly basis. In fact, Cheng’s companies do not seem to have a total of 14 employees.
To support fraudulent representations in loan applications regarding the number of employees and paychecks by Cheng companies, CHENG actually provided fraudulent and tax records that did not actually include RIS and fake electronic signatures. Salary company employee. CHENG also provided a salary list for a company that listed more than 90 suspected employees, many of whom include current and former athletes, artists, actors and public figures. For example, the list of staff includes Good Morning America, a former National Football League player and now-famous Penn State football co-anchor.
According to CHENG’s fraudulent PPP loan applications, more than $ 3.7 million in PPP loans have been approved for Cheng companies and an estimated $ 2.8 million in PPP loans. CHENG transferred more than $ 1 million, including $ 360,000 in cash and / or cashier’s checks, as needed for PPP loans for wages, mortgage interest, rent and / or utilities. , And at least $ 279,000 in personal expenses. These personal expenses include the purchase of an 18-carat gold rolex watch for approximately $ 40,000, a luxury condominium used by CHENG for $ 17,000 per month for rent and entry fees, an estimated $ 50,000 for condominiums, a limited edition 2020 S560X4 Mercedes and an estimated $ 37,000. Dollars by Louis Whitton, Chanel, Berry, Gucci, Christian Lubutin and Eve St. Laurent.
In addition to the aforementioned COVID-19 pandemic loan fraud, at least in 2017 or at least 2019 or 2019, CHENG committed fraud by securing and receiving approximately $ 400,000 in investments from Alchemy Coin Technology Limited and related companies. Alchemy Coin ”) is controlled by CHENG. These investments were made possible by the false and misleading statements and misrepresentations of Alchemy Coin’s capital access, investor revenue, the proposed blockchain-based peer-to-peer lending platform, and the registration of the tokens as part of the initial coin supply.
Finally, at least in 2018, or at least until 2019 or 2019, CHENG committed wire fraud by a number of startups, known as “appropriate precautions”, as part of a precautionary measure. Payment Schedule. CHENG has lied to companies seeking investors, saying that CHENG will take proper care of its companies and provide them with financial support in the form of a full refund. However, CHENG did not have the investment interest or financial capacity of any of the affected companies, did not respond to refundable claims despite repeated requests from victims, and instead used due diligence for personal expenses. CHENG falsely told victims that CHENG did not have the funds and that the third-party security company it had built had stolen the money.
New York, New York 25 Changes, April 20, 2021 The United States is guilty of one count of fraud, one bank fraud, one security fraud and one wire fraud.
In addition to his imprisonment, CHENG was sentenced to three years in prison and ordered to lose all luxury items, including Mercedes, Rolex watches and diamond engagement rings. Compensation for victims of crime will be prepared the next day. CHENG also agreed to leave the United States when he was released.
Ms. Strauss commended the Federal Bureau of Investigation, the Office of the Inspector General of Small Business Administration, and the Office of Internal Revenue Service for their criminal investigation. Ms. Strauss thanked the US Commission for Support and Exchange, the US Customs and Border Protection, and the New York State Department of Labor for their support.
The case is being investigated by the Office of Complex Fraud and Cybercrime. Assistant United States Attorney Sagar K. Ravi is the chief prosecutor.