U.S. DOJ Indicts Justinn Cheng for ICO and Covid-19 Fraud

A New York resident, aged 24, has pleaded guilty to acquiring over $7 million in COVID-19 relief via fraudulent loan applications and misleading investors in a fraudulent ICO (Initial coin offering) during 2018. As per the U.S. DOJ announcement (Department of Justice), Taiwanese national Justin Cheng, also identified as “Justin Jung”, presented a list of online loan applications supplemented by forged tax and payroll records in May and August last year.

As per a U.S DOJ announcement, Justin Cheng pled guilty to major fraud against the U.S. bank fraud, securities fraud, and wire fraud connected with various fraud schemes he committed. Cheng counterfeited documents to obtain approximately $7 million via the PPP (Paycheck Protection Program) being rolled out by the government through the COVID-19 pandemic to assist small businesses to keep staffs on the payroll.

Justin Cheng Refers Himself as a Serial Entrepreneur

Cheng’s applications featured fraudulent IRS (Internal Revenue Service Tax) and payroll records indicating to document the names of 200 employees gaining $1.5 million in monthly wages from Cheng’s businesses. Nevertheless, the list consisted of names from current and ex-public figures, involving Good Morning America co-anchor along with deceased “former Penn State football coach.” In enhancement to applying with over five diverse banks, the scammer transferred loan applications to the U.S. government’s PPP and Economic Injury Disaster Loan programs as mentioned above.

The self-proclaimed serial entrepreneur also pled guilty to running a fraudulent ICO between August and October 2018 for his firm. In 2018, Cheng invited investors to participate in his company, Alchemy Coin Technology Limited’s ICO, while giving false reports about its finances and willingness to P2P (peer-to-peer) lending platforms and declining to reveal that the ICO was an unlicensed offering. Moreover, with the acquired funds, Cheng reportedly transferred over $1 million abroad and spent the rest profusely on a $40,000 Rolex, rent for a $17,000 a month apartment, and a 2020 Mercedes, amongst other things.

 Cheng, who joined the U.S. on a Student Visa, also fronted the Alchemy blockchain company, where he earned ICO funds from investors. As per his guilty plea, he could be sentenced to 30 years of jail time. Nevertheless, the DOJ wrote that a Judge would resolve the final sentencing. While obtaining COVID-19 relief funds illegal is out of place, Americans are famous for investing their stimulus cheques in digital currencies, which several consider is a better store of assets amidst devastating economic uncertainty.