ICO Scammer Pleads Guilty to Covid-Relief Scandal worth $7M ByAli RazaPRO INVESTOR Updated: 21 April 2021 An ICO fraudster has pleaded guilty to a scandal in which he defrauded financial institutions over $7 million in Covid relief funds. The fraudster used the proceeds on luxurious personal items, including a new car, Rolex watch, and apartment. The U.S. Department of Justice has arrested a Taiwanese National, Justin Cheng, who has pleaded guilty to charges stating that he fraudulently obtained over $7 million in Covid relief. Cheng had applied for online loans in which he created false records of tax and payrolls from May to August 2020. He also defrauded investors through a false initial coin offering that he set up in 2018. A $7 million relief fund Cheng made various loan applications to different banks to get a relief fund that will support his business through the pandemic. To apply for the loans, he used false IRS tax and payroll records. In the loan applications, he stated that his company had 200 employees who were jointly earning $1.5 million per month. The employee list created by Cheng to get loan approvals was proven fake after the department of justice investigated some of the listed names. The list included prominent people, and he had even included a deceased former coach of Penn State Football. Cheng sent his loan application for a relief fund to more than five banks. He even applied with the U.S. Payment Protection Program and Economic Injury Disaster Loan Programs. From his applications, Cheng acquired $7 million in Covid 19 relief funds to support his fictitious business and employees. However, he spent $17,000 on a luxurious apartment, $40000 on a Rolex watch, and bought a 2020 Mercedes. Fraudulent ICO Scheme Cheng also pleaded guilty to running a fake initial coin offering between October 2018 and October 2018. Cheng had convinced several investors to take part in his company’s ICO. The company was titled ‘Alchemy Coin Technology Limited, where he issued false financial records to the interested investors. Cheng also lied to the investors about the offering, given that it was unlicensed and could not achieve what Cheng had promised to the investors. The U.S. Department of Justice stated that Cheng obtained the proceeds from the ICO using fake statements and even omitted to release financial details. Investors who invested in Alchemy did not get factual details about how their proceeds would be used, and Cheng failed to disclose the coin’s inability as a peer-to-peer lending platform. Cheng will be sentenced on August 3, and he faces imprisonment of up to 80 years.