Judges Gavel, Handcuffs, Dollar Cash And Book On Black Table

Alchemy Coin ICO fraudster faces 80 years in prison over $7M COVID relief scam

Justin Cheng has pleaded guilty to charges of defrauding the U.S. government of over $7 million through the COVID-19 relief program. The Taiwanese national, who resides in New York, also admitted to conducting a fraudulent ICO in 2017 for Alchemy Coin.

In its announcement, the U.S. Department of Justice said that from April 2020, Cheng used the identity of other individuals to apply for the COVID-19 relief funds. The funds were part of CARES Act meant to save small businesses and allow them to retain jobs and offset other expenses during the brutal economic times. Cheng applied for the loans from at least five financial institutions, getting over $7 million. In his applications, he falsely claimed that his companies employed over 200 people and paid a total of $1.5 million in wages, authorities said. However, he only had 14 employees.

Cheng reportedly submitted fraudulent and doctored tax records to get the loans. In some of the applications, he listed the names of several athletes, actors, artists and other public figures as his employees.

Once he received the loans, he reportedly used it on personal expenses including a $40,000 18-carat Rolex watch, a $17,000 per-month condominium, a Mercedes Benz and over $37,000 in designer clothes.

Aside from the COVID-19 relief funds fraud, Cheng also pled guilty to conducting a fraudulent ICO back in 2017. From April that year, he reportedly solicited investment in Alchemy Coin Technology Limited.

DoJ 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.”

The 24-year-old pleaded guilty to one count each of bank fraud, securities fraud, wire fraud and major fraud against the United States. Collectively, he faces a maximum of 80 years behind bars for his crimes. He faces sentencing on August 3 by District Judge Alison Nathan.

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