Sheng-Wen Cheng, COVID-19 Loan Fraud, New York 2023

Sheng-Wen Cheng, a/k/a “Justin Cheng,” a/k/a “Justin Jung,” a Taiwanese national and self-proclaimed “serial entrepreneur,” was sentenced to 72 months in prison for multiple fraud schemes, including a scheme to fraudulently obtain over $7 million in government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic.

In addition to the COVID-19 loan fraud, Cheng also committed securities fraud by lying to investors in his blockchain-based peer-to-peer lending platform, Alchemy Coin Technology Limited and related companies controlled by Cheng, and wire fraud by engaging in an advance fee scheme.

According to the Complaint, Information, and other documents filed in Manhattan federal court, the Coronavirus Aid, Relief, and Economic Security (“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”).

Cheng, who attended Pennsylvania State University, 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, Wynston York LLC, and Neo Bellum Industries Inc. (collectively, the “Cheng Companies”).

In connection with these loan applications, Cheng represented, among other things, that other individuals were the sole owners of the Cheng Companies and that the Cheng Companies together had over 200 employees and paid a total of approximately $1.5 million in wages to those employees on a monthly basis. In fact, however, the Cheng Companies appear to have had a total of no more than 14 employees.

Cheng submitted fraudulent and doctored tax records that were never actually filed with the IRS and payroll records containing the forged electronic signature of a payroll company employee. Cheng also submitted a payroll summary for one of his companies that listed the names of more than 90 purported employees, several of which consisted of imaginary names and fake Social Security numbers.

U.S. Attorney Audrey Strauss said, “Sheng-Wen Cheng fraudulently applied for over $7 million in government-guaranteed loans under programs designed to provide relief for financially struggling small businesses hurt by the COVID pandemic. Further, 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. Now Cheng has been sentenced to prison for his multitude of crimes.”

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