SAN JOSE — A man was arrested after authorities say he fraudulently took advantage of federal pandemic relief programs, illicitly gaining about $2 million dollars which he used to buy cryptocurrency, purchase a Tesla and dine at restaurants.
According to the U.S. Attorney’s Office for the Northern District of California, 40-year-old Lebnitz Tran, of San Jose, allegedly submitted 27 phony applications to the Paycheck Protection Program and at least seven applications to the Economic Injury Disaster Loan program, both of which were established to help businesses across the country weather the financial storms of the coronavirus pandemic.
Tran is accused of working up applications “on behalf of multiple persons and business entities, using false and fictitious information and documents, including falsified employee information, fictitious or grossly exaggerated payroll figures, and fake tax documents.”
A federal indictment claims Tran sought more than $8 million in all during his scheme, and obtained over $3.6 million in loans, and ultimately came away with about $2 million.
“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,” a statement from the U.S. Attorney’s Office said.
Tran is being charged with six counts of wire fraud and three counts of bank fraud. If convicted, he could face a maximum penalty of 30 years in prison for each count of bank fraud, and 20 years in prison for each count of wire fraud, authorities said.
The FBI and the Small Business Administration’s Office of Inspector General are investigating the case, under the umbrella of the federal COVID-19 Fraud Enforcement Task Force.