SAN FRANCISCO (KCBS RADIO) – Nearly a year after his arrest, a San Jose man has pleaded guilty to fraudulently obtaining $3.6 million in COVID-19 relief loans.
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The U.S. Attorney’s Office for the Northern District of California announced on Friday that 41-year-old Lebnitz Tran pleaded guilty to two counts of wire fraud as part of a plea agreement.
Four other wire fraud charges and one count of bank fraud will be dismissed at his Nov. 3 sentencing if he complies with the plea agreement, according to prosecutors. He faces a maximum prison sentence of 20 years for each count of wire fraud.
Tran allegedly falsified at least 34 Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) applications as he sought about $8.5 million in payments, according to court documents.
Prosecutors alleged he used fake employee information, payroll figures and tax documents to apply for loans on behalf of "multiple" people and business entities, obtaining about $3.6 million in loans. Tran netted $1.7 million himself, as he and others then went on a spending spree.
Tran and his cohort allegedly deposited money into their personal investment accounts, purchased cryptocurrency, meals at restaurants, retail merchandise and even "a $100,000 Tesla from a luxury car dealership," according to the U.S. Attorney's Office.
Tran was arrested on July 9, 2021, nearly two months after Attorney General Merrick Garland created a task force to investigate COVID-19 relief fraud.
Experts have said as much as $80 billion in PPP loans were fraudulently obtained, and the Small Business Administration Inspector General testified last year that nearly $80 billion in EIDL relief could've been fraudulent. The National Bureau of Economic Research wrote earlier this year that, of the $510 billion in PPP loans distributed in 2020, an estimated $370 billion went to the richest 20% of households.
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