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Alchemy Coin CEO handed seven years in jail for defrauding the U.S government and investors.

Alchemy Coin CEO handed seven years in jail for defrauding the U.S government and investors.


A man charged with defrauding the U.S. government with over $7 million in a well-orchestrated COVID relief scam has been sentenced to seven years in prison by a federal court. Justin Cheng is also charged with defrauding investors over $400,000 in an alleged ICO scam. The Taiwanese resident had entered the U.S. on a student visa to attend Pennsylvania State University.

 

Cheng exploited the PPP program and defrauded the government. 

According to the U.S. Department of Justice (DoJ), he submitted online applications from April to August 2020 and ended up getting over $7 million from the SBA’s Paycheck Protection Program. The PPP program disbursed forgivable loans to small businesses for job retention during the COVID-19 economic havoc. The DoJ said that Cheng purported to employ over 200 and to pay over $1.5 million in monthly wages, while in reality, he only employed 14 people. In his online applications for the loans, he included some random names and the names of popular figures, including a TV anchor and a former NFL player.

 

Cheng spent most of the money on personal expenses. 

When Cheng received the money, authorities said he didn’t use it for business expenses as required by the law. Cheng reportedly transferred $1 million abroad, withdrew $360,000 in cash, and spent an almost similar amount on personal expenses, including acquiring a $40,000 18-carat gold Rolex and a 2020 S560X4 Mercedes. Furthermore, from 2017 to 2019, he lured investors who forked out $400,000 towards Alchemy Coin Technology Limited. The 25-year-old pleaded guilty to four charges in April this year. He admitted to one count each of major fraud against the U.S., securities fraud, wire fraud, and bank fraud. 



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