Date: 06-13-2024

Case Style:

United States of America v. David Tai Leung

Case Number: 3:22-329

Judge: Charles R. Breyer

Court: The United States District Court for the Northern District of California (San Francisco County)

Plaintiff's Attorney: The United States Attorney’s Office in San Francisco

Defendant's Attorney:

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Description:

San Francisco, California criminal defense lawyer represented the Defendant charged with Multi-Million-Dollar Covid-19 Fraud Scheme
San Jose Restaurant Owner Sentenced To Two-And-A-Half Years In Prison In Multi-Million-Dollar Covid-19 Fraud Scheme

David Tai Leung, 58, of Sacramento, pleaded guilty in February 2024 to three counts of wire fraud, in violation of 18 U.S.C. § 1343, in connection with fraudulently obtained loans he received from the Restaurant Revitalization Fund (RRF) and the Paycheck Protection Program (PPP). He was originally indicted on those charges in August 2022.

Leung — who co-owned and controlled the finances of a San Jose restaurant—submitted an application in May 2021 for $5 million in RRF funds that he certified he would use for approved business-related expenses like payroll, business rent or mortgage costs, and business maintenance expenses and utilities. However, Leung admitted he knew when he made these certifications that, in fact, he intended to use the RRF funds for purposes other than those he had indicated on the application. In reliance on the statements and certifications in Leung’s application, the SBA granted the application and funded the loan in full in June 2021. Leung admitted he then transferred $3.5 million to a personal investment account he controlled and used RRF funds to purchase securities and pay fees associated with the refinancing of the mortgage on his personal residence in Sacramento, all in violation of RRF program requirements restricting the use of RRF funds to specified eligible business-related uses.

In his plea agreement, Leung also admitted that he had previously applied for and received two PPP loans that he had misused to enrich himself—one for $257,100 that was funded in April 2020 and a second for $360,055 that was funded in March 2021. Rather than use those funds for approved business-related expenses, Leung admitted he used the money to enrich himself, including by making payments to a Lexus dealership and spending money at a casino in Northern California.

Ultimately, Leung admitted he received approximately $5.6 million in RRF and PPP funds and that he unlawfully used $3,359,701.28 of those funds. Leung agreed, and was ordered, to pay that amount in restitution.

The PPP was administered by the SBA as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in 2020 to provide billions of dollars in emergency financial assistance to millions of Americans suffering from the economic effects of the COVID-19 pandemic. The RRF was administered by the SBA as part of the American Rescue Plan Act (ARPA), a federal law enacted in 2021 to provide funding and support to restaurants, bars, and similar businesses serving food and drink that suffered revenue losses as a result of the COVID-19 pandemic and related mitigation measures. The PPP and RRF provided forgivable loans and grants to small businesses for job retention and certain other qualified business expenses.

In addition to sentencing Leung to prison and ordering him to pay more than $3.3 million in restitution, Judge Breyer ordered the defendant to serve three years of supervised release to begin after his prison term is completed.

Assistant U.S. Attorneys Ivana Djak and Alethea Sargent are prosecuting the case. The prosecution is the result of an investigation by the FBI and SBA OIG.

Outcome:

Defendant was found guilty and sentenced to30 months in prison and ordering him to pay more than $3.3 million in restitution, Judge Breyer ordered the defendant to serve three years of supervised release to begin after his prison term is completed.

Plaintiff's Experts:

Defendant's Experts:

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