An ICO fraudster from New York pleaded guilty to acquiring $7 million in a COVID-19 relief scam via fraudulent loan applications and misleading investors as we can see more in our latest crypto news today.
The ICO fraudster, a 24-year old from New York, pleaded guilty to acquiring more than $7 million in a loan scam by misleading investors in a fraudulent initial coin offering back in 2018. According to a Tuesday announcement from the United States Department of Justice, Taiwanese national Justin Jung submitted online loan applications that were accompanied by forged tax and payroll records in 2020.
Cheng’s applications featured fraudulent Internal Revenue Service Tax and payroll records with fake documents of 200 employees that earned $1.5 million in monthly wages from Cheng’s business. The list consisted of names from the current and former public figures like Good Morning America co-host and the now-deceased former Penn State Football coach. In addition to applying with five different banks, the scammer sent a series of loan applications to the US government Paycheck Protection Program and Economic Injury Disaster Loan program.
Cheng was quite successful in securing $7 million worth of COVID-relief for the “employees” which was reportedly spent on personal expenses like a $40K Rolex, expensive rent, and a 2020 Mercedes. According to US Attorney Audrey Strauss:
“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.”
The “serial entrepreneur” pled guilty to operating a fraudulent ICO back in 2018 as well. Back then, Cheng solicited investors to take part in the ICO for his company Alchemy Coin Technology Limited while still making false statements about the company’s finances and readiness of the peer-to-peer lending platforms but he never disclosed that the ICO was an unlicensed offering as the Department of Justice stated:
“These investments were obtained through materially false and misleading statements and omissions regarding Alchemy Coin’s access to capital, use of investor proceeds, the product readiness of its purported blockchain-based peer-to-peer lending platform, and the registration of its tokens as part of an initial coin offering.”
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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