San Jose restaurant owner sentenced – NBC Bay Area

A San Jose restaurateur was sentenced to 30 months in prison for fraudulently obtaining and misusing millions of dollars in COVID-19 relief funds.

Federal authorities said Thursday that David Tai Leung, 58, of 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 (RRF) and the Paycheck Protection Program (PPP).

According to his plea agreement, Leung, who co-owned and controlled the finances of a San Jose restaurant, submitted a request in May 2021 for $5 million in RIF funds that he certified he would use for expenses approved professional functions such as payroll, business. rent or mortgage costs, as well as business maintenance and utility expenses.

The U.S. Attorney's Office said Leung, who was indicted in August 2022, admitted that he intended to use RIF funds for purposes other than those he stated in the application.

The SBA granted the request and fully funded the loan in June 2021. U.S. Justice Department officials said Leung admitted to then transferring $3.5 million to a personal investment account that he he controlled and used the RIF funds to purchase securities and pay fees associated with refinancing the loan. mortgage on his personal residence in Sacramento, all in violation of RRF program requirements limiting the use of RRF funds to specified eligible business uses.

Leung also admitted in his plea agreement that he previously applied for and received two PPP loans that he misused to enrich himself: one for $257,100 funded in April 2020 and a second for $360,055 funded in March 2021 .

Rather than using these funds for approved business expenses, Leung said he spent the money on himself, including making payments to a Lexus dealership and spending money at a casino in North Korea. California.

Leung admitted to receiving approximately $5.6 million in RIF and PPP funds and illegally using $3,359,701.28 of those funds. Leung will pay this amount as compensation.

Leung will also serve three years of supervised release, beginning at the end of his prison sentence.

The PPP was 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 pandemic.

The RRF was 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 beverages that have suffered revenue losses during the pandemic.