A New Tesla but Still No Getaway Car

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Lebnitz Tran, 40, of San Jose, Calif., has been charged for plotting to fraudulently submit loan applications through the Paycheck Protection Program (PPP). He was hoping he could receive millions of dollars in Economic Injury Disaster Loan (EIDL) relief funds. (Well, his hopes were dashed in the end. Now he has some ‘splaining to do.)

At least 27 PPP loan applications were submitted by Tran alongside seven EIDL loan

Applications, which were submitted under the names of multiple people and business identities. Tran’s submissions were supported with fictitious documents and other falsified information like tax documents and exaggerated payroll figures. (While he thought he was strengthening his case for why he needed the loans, he was really just strengthening the court’s case against him.)

Tran allegedly aimed to collect $8 million in PPP and EIDL COVID-19 relief loans. The Californian successfully earned more than $3.6 million in loan proceeds. Overall, Tran obtained a net of $2 million from his fraudulent COVID relief funds. (The bigger relief is that he was eventually caught in his web of lies.) 

According to the indictment, funds were spent on personal expenses such as buying cryptocurrency, purchasing a Tesla car, making purchases at restaurants, and making depositsinto personal investment accounts. (Good luck using your luxurious new car while you’re stuck in a prison cell.)

Charges include three counts of bank fraud and six counts of wire fraud. If convicted, Tran may face a maximum of 30 years in prison for each count of bank fraud. Likewise, he may face up to 20 years in prison for each count of wire fraud. (He could be behind bars for a very long time if he is found guilty. Let’s just say that I doubt that new Tesla will serve as a getaway car.)

Today’s Fraud of the Day comes from a Department of Justice press release, “California Man Arrested for $3.6 Million PPP and EIDL Loan Fraud,” dated July 9, 2021.

A California man was arrested Thursday on criminal charges related to his alleged scheming to submit fraudulent loan applications seeking millions of dollars in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) COVID-19 relief funds.

According to an indictment returned last week by a federal grand jury in San Francisco, and unsealed today, Lebnitz Tran, 40, of San Jose, submitted at least 27 PPP loan applications and at least seven EIDL loan applications on behalf of multiple persons and business entities, using false and fictitious information and documents, including falsified employee information, fictitious or grossly exaggerated payroll figures, and fake tax documents. The indictment alleges that Tran sought in excess of $8 million in PPP and EIDL funds, obtained over $3.6 million in illicit loan proceeds, and ultimately netted approximately $2 million from the scheme. The indictment further alleges that Tran and others used these illicit loan proceeds to make purchases at restaurants and retail stores, make deposits into personal investment accounts, buy cryptocurrency, and, in one instance, to purchase a $100,000 Tesla from a luxury car dealership.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.