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Justin Cheng, the CEO of Alchemy Coin, has been sentenced by a federal court to 7 years in prison. The man is alleged to have defrauded the U.S. government of approximately $7 million, in a well-organized COVID aid scam. In addition to this, the man is also accused of scamming investors for over $400,000 in allegedly an ICO scam.
Received more than $7 million
Justin Cheng himself is a resident of Taiwan but was able to enter the United States via a student visa in order to attend Pennsylvania State University.
Last year, from April 2020 to August 2020, Cheng submitted various online forms, eventually receiving over $7 million from the so-called Paycheck Protection Program or PPP. This PPP is a program that provides loans with very favorable terms to small businesses, with the goal of preserving jobs within the businesses during the economic impact of COVID-19.
In the forms, Cheng claimed that he employed over 200 employees and had to pay over $1.5 million in wages each month as a result. He reportedly included some random names for his online applications for the loans, as well as the names of popular figures, including a TV anchor and a former NFL player.
72 months imprisonment
According to the law, the money obtained from the PPP must be used for business expenses. This Cheng appeared not to do: reportedly, approximately $1 million was transferred abroad, $360,000 in cash was withdrawn, and approximately the same amount was also spent on personal expenses.
In addition, from 2017 to 2019, Cheng allegedly lured investors into "Alchemy Coin Technology Limited," in which they invested approximately $400,000. The U.S. federal court says the following about this:
"These investments were obtained through materially false and misleading statements and omissions regarding Alchemy Coin's access to capital, its use of investor proceeds, the product readiness of its purported blockchain-based peer-to-peer (p2p) lending platform and the registration of its tokens as part of an initial coin offering."
Justin Cheng, who is now 25 years old, has now pleaded guilty to four charges. For these, he was given a 72-month prison sentence by U.S. District Judge Alison Nathan. In addition, he will be released on supervised release for three years and the luxury goods seized in connection with his arrest will be forfeited.
What do you think? Does Justin deserve the 72 monthly punishment? Or is this a very light sentence?
