The US has arrested a man on criminal charges after allegedly defrauding the government’s Covid-19 loan programs and using the money to buy cryptocurrency and Tesla.
Using a PPP Loan to Buy Cryptocurrency and Tesla
The US Department of Justice (DOJ) announced on Friday that Lebnitz Tran was arrested on Thursday “on criminal charges related to his alleged intrigue to file fraudulent loan applications for millions of dollars in the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Covid to submit -19 aid fund. “
According to an indictment unsealed on Friday, the 40-year-old man from San Jose, California has filed at least 27 PPP loan applications and at least seven EIDL loan applications on behalf of several individuals and companies.
The indictment alleges that “Tran sought more than $ 8 million in PPP and EIDL funds, received over $ 3.6 million in illegal loan proceeds, and ultimately raised approximately $ 2 million from the program “. The DOJ noted:
Tran and others used these illegal loan proceeds to make purchases at restaurants and retail stores, make deposits into personal investment accounts, purchase cryptocurrency and, in one instance, buy a $ 100,000 Tesla from a luxury car dealership.
He allegedly used “false and fictitious information and documents, including falsified employee information, fictitious or grossly exaggerated pay slips and falsified tax documents,” the Justice Department said, adding:
Tran is charged with six wire transfer fraud cases and three bank fraud charges. If convicted, he faces a maximum sentence of 30 years in prison for each case of bank fraud and 20 years in prison for each case of wire transfer fraud.
This is not the first time someone has been charged with using Covid aids to buy cryptocurrency. In July, Joshua Thomas Argires of Houston, Texas, was charged with Covid auxiliary fraud for investing in cryptocurrency with a PPP loan, among other things.
In April Darryl Corradini and Vicki Hackenberg, both from Bloomsburg, Pennsylvania, were charged similarly. They used over $ 350,000 in fraudulently obtained government loans, including a PPP loan, to buy bitcoins.
In March, a Los Angeles-based fraud ring was charged with exploiting Covid-19 relief programs after filing over 150 fraudulent loan applications demanding over $ 21.9 million in Covid-19 relief funds. The fraudulently obtained funds were used, among other things, to buy cryptocurrencies.
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