Taiwanese National Allegedly Used Millions In US COVID Relief Scheme On Luxury Items, Mercedes

A Taiwanese national living in Manhattan has been charged with fraudulently obtaining over $7 million in government-guaranteed loan programs that were intended to provide help to small businesses during COVID-19 pandemic.

According to a press release from the U.S. Attorney’s Office for the Southern District of New York, the accused, identified as 24-year-old Sheng-Wen Cheng, entered the United States on a student visa and earned a Bachelor’s Degree from Pennsylvania State University.

In the last four months, the self-proclaimed "serial entrepreneur used the identities of other individuals to submit online applications to the SBA (Small Business Administration) and at least five financial institutions for a total of over $7 million in government-guaranteed loans through the SBA’s PPP and EIDL Program for several companies controlled by him," the press release stated. The accused allegedly used the money to fund luxury items.

He also falsely stated that a total of over 200 employees worked in the companies owned by him and he paid $1.5 million in monthly wages. Investigation, however, revealed his companies had only 14 employees.

"Of the approximately $2.8 million in PPP loan proceeds that Cheng has received to date, he transferred over $880,000 abroad, withdrew approximately $360,000 in cash and/or cashier’s checks, and spent over $275,000 on personal expenses," the press release stated.

He was arrested Tuesday and was charged with several offenses including "major fraud against the United States, wire fraud, and bank fraud, as well as one count of aggravated identity theft for forging the electronic signature of a payroll company employee in payroll documents provided to financial institutions."

Speaking about the case, Acting U.S. Attorney Audrey Strauss said in the press release, "At a time when so many small businesses and their employees are facing dire financial straits, Sheng-Wen Cheng allegedly saw not an emergency lifeline but a gravy train. As alleged, Cheng fraudulently applied for over $7 million in government-guaranteed loans under programs designed to provide relief for small businesses financially strapped by the COVID-19 pandemic."

"Cheng allegedly lied to the Small Business Administration and several financial institutions about ownership of his companies, the number of people the companies employed, and how any loan proceeds would be applied, and he used forged and fraudulent documents in the process. Of the nearly $3 million he actually received, Cheng allegedly transferred nearly $1 million to overseas accounts, and spent nearly $300,000 on personal luxury items such as an 18-carat gold Rolex, a $17,000-a-month luxury condo, and a Mercedes. The paid vacation ended with his arrest this morning," Strauss said in the press release.