Lebnitz Tran, PPP Loan Scam, California 2024

A brazen $3.6 million Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) loan scam has been uncovered in California, with a 40-year-old San Jose man at the center of the scheme.

Lebnitz Tran, 40, of San Jose, was arrested Thursday on six counts of wire fraud and three counts of bank fraud, stemming from his alleged submission of at least 27 PPP loan applications and seven EIDL loan applications using false and fictitious information and documents.

The indictment, returned last week by a federal grand jury in San Francisco and unsealed Thursday, 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.

According to the indictment, Tran and others used the illicit loan proceeds to make purchases at restaurants and retail stores, make deposits into personal investment accounts, buy cryptocurrency, and even purchase a $100,000 Tesla from a luxury car dealership.

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, made the announcement.

The FBI and SBA-OIG are investigating the case, with Trial Attorney Christopher Jackson of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sarah Griswold of the Northern District of California prosecuting the case.

The Attorney General established the COVID-19 Fraud Enforcement Task Force on May 17, 2021, to combat and prevent pandemic-related fraud. If convicted, Tran 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.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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