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San Jose restaurant owner sentenced in multi-million coronavirus fraud

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(The Center Square) – A restaurant owner with a business in San Jose who fraudulently got and misused millions of dollars in coronavirus federal stimulus relief funds received a 30-month federal prison sentence last week according to the U.S. Attorney.

David Tai Leung, a 58-year-old from Sacramento, pleaded guilty in February 2024 to “three counts of wire fraud, in connection with fraudulently obtained loans he received from the Restaurant Revitalization Fund and the Paycheck Protection Program,” a release said. He was indicted in August 2022.

Leung co-owned and ran the finances of a San Jose restaurant. He submitted an application in May 2021 for $5 million in RRF funds that he claimed would go to business-related expenses. Those supposed expenses included “payroll, business rent or mortgage costs, and business maintenance expenses and utilities,” the release said.

Yet, Leung admitted to knowing that when he made these certifications, his intent was always to use these RRF funds for other purposes not related to the business.

The SBA funded the loan in full in June 2021 and transferred $3.5 million to his personal investment account. He used this money primarily to buy securities and pay fees associated with the refinancing of the mortgage on his personal residence in Sacramento, violating RRF program requirements.

As a part of his plea agreement, Leung admitted that he had also received and misused two PPP loans. One was for $257,100 in April 2020, while another was for $360,055 in March 2021.

Leung spent that money on himself, including making payments at a Lexus dealership, plus spending money at a northern California casino.

Leung ultimately admitted to receiving about $5.6 million in RRF and PPP funds and illegally using $3,359,701.28 of those funds. He agreed to pay that amount back in restitution.

The SBA administered PPP funding as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act — a federal coronavirus stimulus package passed in 2020.

The SBA administered the RRF due to the American Rescue Plan Act, a federal coronavirus stimulus package passed in 2021.

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