An initial coin offering founder was recently pronounced guilty by the court for lavishing money fraudulently gotten from a COVID relief fund. The founder spent a huge part of the money on luxurious items, including an expensive watch, a new Mercedes Benz, and other personal effects. The crypto enthusiast lives in New York, and he has been officially pronounced guilty by the region’s court for acquiring his wealth through scams.
The 24-year-old applied for a loan regarding COVID relief and was also found guilty of deceiving investors who invested in his fraudulent ICO. The digital asset space has some bad players, making it hard for investors to invest in new assets as many initial coin offerings are scams orchestrated by the organizers.
Cheng applied for loans through fraudulent means
Yesterday, the region’s Department Of Justice shared some evidence that implicated Justin Cheng, a native of Taiwan. The young man sent numerous loan applications, and he forged his tax and payroll for some months in 2020. The Taiwanese national forged the loan application to include a false IRS tax and payroll record, which shows that he had over 200 people working under him. The people earned a total of $1.5 million monthly as a salary from his business.
Interestingly, Cheng’s reported employees had names with some known persons on various media. He listed names from both living and deceased people, such as Good morning America’s host and even a deceased football coach.
The scammer sent the fraudulent application to numerous banks and also sent the same application to a government-owned agency called Paycheck Protection Program. The ICO founder was able to get loans from various banks, and the loans worth about $7 million in total. The loan was awarded to him due to a large number of employees.
Cheng purchased numerous items with the fraudulently acquired money, and reports show that he purchase a Rolex watch, which is worth around $40,000, a luxury apartment, and a Mercedes Benz. One of the region’s attorneys, Audrey Strauss, spoke about Cheng’s successful scam.
Cheng misled ICO investors
The attorney explained that Cheng lied to many banks about having employees, about owning many companies, and he added that the scammer used false documents to ensure the smooth process. Strauss concluded that Cheng spent most of the money on personal items.
Asides from his COVID relief scam, the court also found him guilty of operating and organizer a fraudulent initial coin offering, which led to the loss of money of those who invested in the asset. The entrepreneur organized the scam by inviting and encouraging investors to buy his coin.
Cheng deceived the investors by lying about his business’s financial position and failing to disclose that the government did not license his token. The attorney explained that Cheng misled the people by omitting to inform investors about his company, Alchemy Coin Technology’s finances, and also used the funds gotten from the scam for personal items. The court has given Cheng a sentencing date, which means he can face up to 80 years in prison.