The U.S. Department of Justice (DOJ), announced that Lebnitz Tran had been arrested on Thursday. He was charged with scheming in order to submit fraudulent loan applications for millions of dollars in Paycheck Protection Program, EIDL and Covid-19 relief funds.
A Friday indictment revealed that the 40-year old San Jose man submitted at most 27 loan applications to PPP and at least seven EIDL loans for multiple business entities and individuals.
According to the indictment, Tran was accused of seeking more than $8 million in EIDL and PPP funds, obtaining over $3.6million in illicit loan proceeds and eventually netting approximately $2 million. The DOJ stated:
Tran and others used the illicit loan proceeds to buy food and other retail items, deposit money into personal investment accounts, purchase cryptocurrency and to purchase a Tesla Model S from a luxury car dealer for $100,000.
The Justice Department stated that he used “false and fraudulent information and documents”, including falsified employee data and grossly exaggerated payroll numbers and fake tax documents.
Six counts of wire fraud are against Tran, and three of bank fraud. He faces a maximum sentence of 30 years imprisonment for each count. For each count, Tran will be subject to 20 years in prison.
This is not the first instance of someone being charged with using Covid relief funds to purchase cryptocurrency. Joshua Thomas Argires, a Houston resident, was indicted with Covid relief fraud, including using a PPP loan for cryptocurrency investments.
Vicki Hackenberg and Darryl Corradini, both from Bloomsburg, Pennsylvania were also charged in April. To purchase bitcoins, they used more than $350,000 in fraudulently obtained government loans including a PPP loan.
A fraud ring based in Los Angeles was indicted in March for using Covid-relief programs. They submitted over 150 loan applications, seeking more than $21.9 million in Covid-19 relief money. The funds obtained fraudulently were used, among others, to purchase cryptocurrency.