New Brunswick man admits to defrauding bank with $2 million SBA loan, faces 30 years in prison
John Cheng, 58, of New Brunswick, New Jersey, pleaded guilty to loan application fraud in federal court yesterday.
According to documents filed in the case, Cheng submitted a Small Business Administration (SBA) loan application for $1.75 million and a commercial loan application for $2 million in December 2007, claiming the funds would be used for a restaurant in Skillman, New Jersey.
However, after receiving the $2,082,229 loan in March 2008, Cheng used the funds for his own benefit, including paying off gambling debts, sending money to family members, and paying a federal tax bill.
The charge to which Cheng pleaded guilty carries a maximum potential penalty of 30 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
Under his plea agreement, Cheng must pay restitution of $2,657,687.15 to the bank he defrauded and forfeit $1,696,506.
Cheng’s sentencing is scheduled for October 25, 2017.
Acting U.S. Attorney William E. Fitzpatrick credited the FBI and the U.S. Small Business Administration’s Office of Inspector General with the investigation.
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Key Facts
- State: New Jersey
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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