Alchemy Coin ICO fraudster faces 80 years in prison over $7M COVID relief scam


Justin Cheng pleaded guilty to defrauding the US government over $ 7 million as part of the COVID-19 aid program. The Taiwanese national, who lives in New York, also admitted to running a fraudulent ICO on Alchemy Coin in 2017.

In its announcement, the U.S. Department of Justice said that as of April 2020, Cheng used other people’s identities to apply for the COVID-19 relief funds. The funds were part of the CARES Act, which aims to rescue small businesses and allow them to retain jobs and offset other expenses during the brutal economic times. Cheng applied for the loans from at least five financial institutions and received over $ 7 million. In his filings, he falsely claimed that his companies employed over 200 people and paid a total of $ 1.5 million in wages, authorities said. However, he only had 14 employees.

Cheng reportedly submitted fraudulent and manipulated tax documents to obtain the loans. In some applications he listed the names of several athletes, actors, artists and other public figures as his employees.

After receiving the loans, he reportedly used them for personal expenses, including an 18-karat Rolex watch valued at $ 40,000, a condo valued at $ 17,000 per month, a Mercedes Benz, and designer clothing of over $ 37,000.

Aside from the COVID-19 aid fraud, Cheng pleaded guilty to running a fraudulent ICO back in 2017. As of April this year, he is said to have asked for an investment in Alchemy Coin Technology Limited.

The DoJ stated, “These investments were driven by materially false and misleading statements and omissions regarding Alchemy Coin’s access to capital, the use of investor proceeds, the product readiness of its alleged blockchain-based peer-to-peer lending platform, and the registration of its Platform earns tokens as part of an initial coin offering. “

The 24-year-old pleaded guilty to counting bank fraud, securities fraud, wire fraud, and serious fraud against the United States. Overall, he has been behind bars for a maximum of 80 years for his crimes. He is sentenced on August 3rd by District Judge Alison Nathan.

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