Federal prosecutors allege that Choi submitted fraudulent applications for COVID-19 business relief loans designed to help legitimate businesses survive pandemic-related economic disruptions. According to the indictment, Choi represented himself as the CEO and owner of a business called “Premier Republic,” which prosecutors said was a “fictional entity that neither had business operations nor hired anyone.”
On behalf of Premier Republic, Choi is accused of having submitted a fraudulent Economic Injury Disaster Loan application, receiving some $2 million in funds. Prosecutors allege that Choi later wired the proceeds of the scheme to an account at crypto exchange Kraken.
Prosecutors seized nearly 40 BTC, along with other cryptocurrencies, as part of the investigation.
The charges carry significant potential penalties if Choi is convicted, with each wire fraud count carrying a maximum sentence of 30 years and the money laundering charge carrying a maximum sentence of 10 years.
The case highlights ongoing federal efforts to prosecute alleged fraud related to pandemic relief programs, which distributed billions in emergency funding to businesses during COVID-19 lockdowns. The Small Business Administration and other agencies have worked with law enforcement to identify potentially fraudulent claims among the millions of applications received.
Authorities around the world are continuing to prosecute cases where COVID relief was misused to purchase cryptocurrency.
