Sheng-Wen Cheng, Fintech CEO Pleads Guilty To Multiple Fraud Schemes, New York 2021

A high-flying fintech executive has pleaded guilty to swindling millions of dollars from government-backed loan programs and investors in a scheme that spanned the COVID-19 pandemic.

Sheng-Wen Cheng, a/k/a “Justin Cheng,” a/k/a “Justin Jung,” a Taiwanese national, pleaded guilty to major fraud against the United States, bank fraud, securities fraud, and wire fraud in connection with multiple fraud schemes he perpetrated, according to the US Attorney for the Southern District of New York.

Specifically, Cheng engaged in a scheme to fraudulently obtain over $7 million in Government-guaranteed loans designed to provide relief to small businesses during the novel coronavirus/COVID-19 pandemic, the complaint alleges. He also solicited and obtained investments in Alchemy Coin Technology Limited and related companies controlled by Cheng through materially false and misleading statements and omissions.

Cheng, a self-proclaimed “serial entrepreneur,” earned a Bachelor’s Degree from Pennsylvania State University (“Penn State”) and used the identity of other individuals to submit online applications to the SBA and at least five financial institutions for a total of over $7 million in government-guaranteed loans through the SBA’s PPP and EIDL Program for several companies controlled by Cheng, namely Alchemy Finance, Inc., Alchemy Guarantor LLC d/b/a “Celer Offer,” Celeri Network, Inc., Celeri Treasury LLC, and Wynston York LLC (collectively, the “Cheng Companies”).

Cheng spent much of the money on personal luxury items, prosecutors said. He is scheduled to be sentenced on August 3, 2021, at 3:00 p.m. before U.S. District Judge Alison J. Nathan.

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, a federal law enacted on March 29, 2020, provided emergency financial assistance to Americans struggling due to the COVID-19 pandemic. The CARES Act authorized hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the SBA’s Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”) Program.

Prosecutors said Cheng committed securities fraud by lying to investors in his blockchain-based peer-to-peer lending platform and wire fraud by engaging in an advance fee scheme. The case against Cheng is a stark reminder of the brazen schemes perpetrated by some individuals during the pandemic.

The outcome of this case is still pending, but Cheng will face a sentence that reflects the severity of his crimes. As the US Attorney for the Southern District of New York noted, “Cheng awaits sentencing for his multitude of crimes.”

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