San Francisco, California - A California man was arrested Thursday on criminal charges related to his alleged scheming to submit fraudulent loan applications seeking millions of dollars in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) COVID-19 relief funds.
According to an indictment returned last week by a federal grand jury in San Francisco, and unsealed today, Lebnitz Tran, 40, of San Jose, submitted at least 27 PPP loan applications and at least seven EIDL loan 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. The indictment alleges that Tran sought in excess of $8 million in PPP and EIDL funds, obtained over $3.6 million in illicit loan proceeds, and ultimately netted approximately $2 million from the scheme. The indictment further alleges that 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.
Tran is charged with six counts of wire fraud and three counts of bank fraud. If convicted, he faces a maximum penalty of 30 years in prison as to each count of bank fraud, and 20 years in prison as to each count of wire fraud.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Stephanie M. Hinds of the Northern District of California; and Special Agent in Charge Craig D. Fair of the FBI’s San Francisco Field Office; and Special Agent in Charge Weston King of the Small Business Administration’s Office of Inspector General (SBA-OIG) Western Region made the announcement.
The FBI and SBA-OIG are investigating the case.
Trial Attorney Christopher Jackson of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sarah Griswold of the Northern District of California are prosecuting the case.