The U.S. has arrested a man on criminal charges after he allegedly defrauded the government’s Covid-19 loan programs and used the money to buy cryptocurrency and Tesla.
Using PPP Loan to Buy Cryptocurrency and Tesla
The U.S. Department of Justice (DOJ) announced Friday that Lebnitz Tran was arrested Thursday “on criminal charges related to his alleged scheming to submit fraudulent loan applications seeking millions of dollars in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Covid-19 relief funds.”
According to an indictment unsealed Friday, the 40-year-old man from San Jose, California, submitted at least 27 PPP loan applications and at least seven EIDL loan applications on behalf of multiple persons and business entities.
The indictment alleges that “Tran sought in excess of $8 million in PPP and EIDL funds, obtained over $3.6 million in illicit loan proceeds, and ultimately netted approximately $2 million from the scheme.” The DOJ noted:
Tran and others used these illicit loan proceeds to make purchases at restaurants and retail stores, make deposits into personal investment accounts, buy cryptocurrency, and, in one instance, to purchase 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 payroll figures, and fake tax documents,” the Justice Department detailed, adding:
Tran is charged with six counts of wire fraud and three counts of bank fraud. If convicted, he faces a maximum penalty of 30 years in prison as to each count of bank fraud, and 20 years in prison as to each count of wire fraud.
This is not the first time someone has been charged with using Covid-relief funds to buy cryptocurrency. In July, Joshua Thomas Argires of Houston, Texas, was charged with Covid relief fraud for using a PPP loan to invest in cryptocurrency, among other things.
In April, Darryl Corradini and Vicki Hackenberg, both of Bloomsburg, Pennsylvania, were similarly charged. They used over $350,000 of fraudulently obtained government loans, including a PPP loan, to purchase bitcoins.
In March, a Los Angeles-based fraud ring was indicted for exploiting Covid-relief programs after submitting over 150 fraudulent loan applications seeking over $21.9 million in Covid-19 relief funds. The fraudulently obtained funds were used to buy cryptocurrency, among other things.
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