Three brothers have been sentenced to federal prison after pleading guilty to wire fraud conspiracy and wire fraud.
Two brothers, William Chan, 40, and Siu Chan, 32, both of Georgia, pleaded guilty to a wire fraud conspiracy.
The third brother, Ka Ho Chan, 33, who also resides in Georgia, pleaded guilty to two counts of wire fraud. The brothers, along with other family members, operate a string of restaurants in the Charleston area.
Evidence obtained in the investigation revealed that beginning in March 2020, the Chan brothers applied for Paycheck Protect Program (PPP) and Emergency Injury Disaster Loans (EIDL) funds using false representations and fraudulent documentation.
The evidence presented for William and Siu Chan revealed that at least 22 PPP and EIDL loans were applied for and received, totalling more than $2.5 million.
The investigation further revealed that a handful of the loans applied for by William and Siu were legitimate applications, but the funds were not used for legitimate business purposes once funded. For example, the government uncovered evidence that the brothers used PPP and EIDL loan funds to make personal car purchases and pay personal credit card expenses.
Ka Ha Chan pleaded to a separate information charging him with wire fraud for an EIDL loan and grant he received. Moreover, in Ka Ha Chan’s plea agreement, he agreed to a restitution figure between $300,000 and $350,000 based on his receipt of fraudulent loan proceeds applied for by his brothers during their conspiracy.
The evidence revealed that all the funds received by Ka Ho through his own wire fraud scheme and the funds he received from his brothers were not used for legitimate business purposes and were used for personal expenses, such as vehicle purchases and personal credit cards.
United States District Richard M. Gergel sentenced William Chan to 24 months’ imprisonment, to be followed by a three-year term of court-ordered supervision. Siu Chan was sentenced to 24 months’ imprisonment, to be followed by a three-year term of court-ordered supervision. Ka Ho Chan was sentenced to 12 months’ and one-day imprisonment, to be followed by a three-year term of court-ordered supervision.
There is no parole in the federal system.
The total amount of fraudulent loans and misuse of EIDL and PPP loan funds presented to the court during sentencing exceeded $2.8 million. In advance of sentencing, efforts had been made by the brothers to pay restitution. As a result, the outstanding restitution owed in the amount of $1,268,386.50 was ordered.
