Date: 07-02-2024

Case Style:

United States of America v. Zhong Jie Chen

Case Number: 1:24-cr-00050

Judge: Christopher R. Cooper

Court: The United States District Court for the District of Columbia (Washington County)

Plaintiff's Attorney: The United States Attorney’s Office for Washington, D.C.

Defendant's Attorney:

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Description:

Washington, D.C. criminal defense lawyer represented the Defendant charged with Theft of More than $350,000 in COVID-19 Relief Funds
Former Maryland Resident Sentenced in Theft of More than $350,000 in COVID-19 Relief Funds

Zhong Jie Chen, 47, who now lives in New Jersey, pleaded guilty to wire fraud.

In court documents, Chen admitted that, while he was a Maryland resident, he was the sole owner of two Shanghai Tokyo Café restaurants, one in the District’s Columbia Heights neighborhood, and the other in College Park, MD. Between May 2020 and July 2021, he applied for Paycheck Protection Program (PPP) and Economic Injury Disaster (EIDL) loans for the two eateries.

The Paycheck Protection Program was a COVID-19 pandemic relief program administered by the U.S. government’s Small Business Administration (SBA) that provided forgivable loans to small businesses for job retention and certain other expenses. Once the PPP loan applications were approved, businesses received loan proceeds from third-party lenders. In response to the COVID-19 pandemic, the SBA also offered EIDL loans to certain entities, including small business owners. These loans were provided directly from the SBA and were low-interest, fixed-rate, long term loans. Both PPP loans and EIDL loans could only be used for specified purposes.

Between May 2020 and July 2021, Chen’s two restaurants received PPP and EIDL loans totaling approximately $964,843. On loan applications, Chen acknowledged understanding how the loans could be used and that if he knowingly used funds for unauthorized purposes, he could be held legally liable by the federal government, and potentially charged with fraud.

Chen admitted that he falsely certified that all loan proceeds would be used for business-related purposes even though he knew and intended that he would misappropriate some loan proceeds to a personal investment account to allow him to engage in day trading. He admitted that he misappropriated $354,520 of loan proceeds and used those funds to engage in day trading through his Robinhood and TD Ameritrade accounts.

This case was investigated by the FBI Washington Field Office. It is being prosecuted by Assistant U.S. Attorneys Kondi Kleinman and Ryan Sellinger, who were assisted by paralegal specialists Sonalika Chaturvedi and Michon Tart.

Outcome:

Defendant was found guilty and sentenced to 18 months in prison

Plaintiff's Experts:

Defendant's Experts:

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