Fraudster Pleads Guilty to $7 Million Covid Relief Fraud Scheme
A 24-year-old Taiwanese native has been arrested and charged with several counts of fraud after he applied for over $7 million in relief aid that was intended for businesses and individuals impacted by the pandemic.
Sheng-Wen Cheng, who also goes by the names Justin Cheng and Justin Jung, was a self-described “serial entrepreneur” who lied about having several companies that employed over 200 individuals. Documents investigating Cheng indicate that his companies actually "appear to have a total of no more than 14 employees."
As part of his fraudulent activity, Cheng lied to the Small Business Administration (SBA) and submitted falsified tax documents that were never submitted to the IRS and payroll forms that listed his fictitious employees. Some of the employees listed included actors, athletes, and other public figures. The Department of Justice shared, “the list of purported employee names included a co-anchor on Good Morning America, a former National Football League player, and a prominent Penn State football coach who is now deceased."
Cheng began his scheme in April of last year when he applied and was approved for $3.7 million in PPP loans. Along with the SBA, Cheng applied to at least five banks for aid. Cheng received almost $3 million that he subsequently used to support his frivolous spending habit.
Cheng was in the states on a student visa where he attended Penn State University and graduated with a bachelor's degree. His visa has since expired early in June 2020.
Acting 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.” Strauss adds, “At a time when so many small businesses and their employees are facing dire financial straits, Sheng-Wen Cheng allegedly saw not an emergency lifeline but a gravy train.”
With the roughly $3 million Cheng was able to secure, authorities explain he sent $1 million of it overseas to the UK, Singapore, Taiwan, and South Korea. Cheng also used roughly $300,000 on personal luxuries including a luxury condo with a monthly payment of $17,000, a Mercedes-Benz, and an 18-carat gold Rolex. Another $360,000 was withdrawn in the form of cashier’s checks and cash.
The FBI Assistant Director William F. Sweeney Jr. slammed the 24-year old for using the relief funds for his own “personal benefit.”
The allegations from the complaint that were unsealed in court detail the various methods Cheng used when applying for the aid. The complaint highlights several charges including one count of major fraud against the United States, bank fraud, wire fraud, making false statements to a bank, making false statements to the SBA, making false statements, and aggravated identity theft. The charges carry with them a maximum of 30 years behind bars. Cheng could face a maximum of 80 years in prison. His sentencing date is set for August 3 in front of District Judge Alison J. Nathan.
