Bay Area/ San Jose/ Crime & Emergencies
AI Assisted Icon
Published on June 14, 2024
San Jose Restaurant Owner Sentenced to 30 Months for Multi-Million Dollar COVID-19 Relief FraudSource: Google Street View

A San Jose restaurant owner caught exploiting federal COVID-19 relief programs has been sentenced to 30 months behind bars. David Tai Leung, 58, of Sacramento, confessed to several counts of wire fraud associated with the misuse of funds from the Restaurant Revitalization Fund (RRF) and the Paycheck Protection Program (PPP), stealing millions intended to help businesses during the pandemic. The U.S. Department of Justice reported Leung's guilty plea in February 2024, with the indictment having first been announced in August 2022.

Per his plea, Leung, an owner and controller of a San Jose eatery's finances, sought $5 million in RRF funds in May 2021, funds designated for pressing business expenses. Despite his assertion on the loan application that he would adhere to the program’s permissible uses of funds for payroll and operations, he instead funneled millions into his personal investments and real estate dealings. Leung also previously received two PPP loans totaling over $600,000, parts of which he spent on personal luxuries, including a Lexus dealership and a casino splurge. In total, he netted approximately $5.6 million in relief funds, misappropriating over $3.3 million.

Implemented as lifelines amidst a global health crisis, the PPP and RRF were intended to keep small businesses afloat, serving as vital support structures for the American workforce. Leung's actions stand in stark contrast to the programs' goals, which aimed to mitigate the severe economic distress placed on residents of the United States during the COVID-19 pandemic. These relief efforts were part of the extensive financial assistance efforts devised in response to the pandemic under the CARES Act of 2020 and the American Rescue Plan Act (ARPA) of 2021.

Leung’s sentencing by Senior U.S. District Judge Charles R. Breyer also includes the mandate for him to pay restitution exceeding $3.3 million. Following his release from prison, Leung will be subjected to three years of supervised release. The case, prosecuted by Assistant U.S. Attorneys Ivana Djak and Alethea Sargent, is the culmination of an investigation by the FBI and the SBA Office of Inspector General. The outcomes serve as a reminder of the legal consequences tied to the misappropriation of emergency governmental aid.