SAN JOSE, Calif. (BCN) — A San Jose man has pleaded guilty to a fraudulent loan application scheme in order to get millions of dollars from programs implemented to assist businesses during the COVID-19 pandemic, the U.S. Department of Justice Northern District of California announced on Friday.
Lebnitz Tran, 41, submitted at least 27 Paycheck Protection Program (PPP) applications and at least seven Economic Injury Disaster Loan (EIDL) relief funds applications on behalf of multiple persons and business entities using false and fictitious information, the DOJ said. In total, Tran sought $8.5 million in PPP and EIDL funds and actually received $3.6 million in illicit loan proceeds, netting approximately $1.7 million from the scheme.
Prosecutors say that Tran and others used this money to purchase at restaurants and retail stores, make deposits into personal accounts, buy cryptocurrency, and, in one instance, purchase a $100,000 Tesla. Tran was indicted on July 1, 2021 for six counts of wire fraud and one count of bank fraud; he pleaded guilty to two counts of wire fraud.
If he complies with the plea agreement, the rest will be dismissed at sentencing, the DOJ said. Tran is scheduled to be sentenced on Nov. 3 and he faces a maximum penalty of 20 years in prison for each count of wire fraud.
He will also most likely be ordered to pay restitution. This case was investigated by the Attorney General’s COVID-19 Fraud Enforcement Task Force.
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