South Carolina – Three Georgia brothers who operated multiple restaurants in South Carolina are headed to federal prison after pleading guilty to their roles in a multimillion-dollar COVID-19 relief fraud scheme.
William Chan, 40, Siu Chan, 32, and Ka Ho Chan, 33, all of Georgia, were sentenced after admitting to fraudulently obtaining over $2.8 million in government relief funds intended to assist struggling businesses during the pandemic.
Federal investigators uncovered a web of deceit that spanned multiple fraudulent applications for Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL).
According to the Department of Justice, the Chan brothers exploited these emergency financial relief programs by submitting false claims, fabricating business records, and misrepresenting their financial situations to secure funding they were not entitled to receive.
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A fraudulent operation unveiled
The investigation revealed that William and Siu Chan organized the bulk of the scheme, applying for at least 22 PPP and EIDL loans. While some of these applications were for legitimate businesses, federal prosecutors found that much of the money obtained was misused for personal expenses rather than payroll and business operations as intended.
Authorities found that instead of helping employees or covering operational costs, the brothers used the funds for luxury personal purchases, including expensive vehicles and paying off personal credit card debts.
Meanwhile, Ka Ho Chan ran his own separate scheme, securing an EIDL loan and grant under false pretenses. In addition, evidence showed that he knowingly received fraudulent proceeds from his brothers’ scheme, further enriching himself with taxpayer-funded relief.
“These defendants exploited a program intended to help struggling businesses during a critical time. Their greed led them to defraud the government and taxpayers, diverting millions of dollars intended for legitimate economic relief,” said Acting U.S. Attorney Brook B. Andrews.
“This sentencing sends a clear message: those who attempt to profit from pandemic aid through fraud will be held accountable,” Andrews added.
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The consequences of greed
After months of investigation, the three brothers were arrested and later pleaded guilty to wire fraud and conspiracy charges. Their sentencing reflects the severity of their crimes:
- William Chan: 24 months in federal prison, followed by three years of supervised release.
- Siu Chan: 24 months in federal prison, followed by three years of supervised release.
- Ka Ho Chan: 12 months and one day in federal prison, followed by three years of supervised release.
Since federal prison sentences do not allow for parole, the brothers will serve their full terms before beginning their supervised release.
In addition to their prison time, the court ordered restitution payments totaling $1,268,386.50, reflecting the funds still owed after partial repayments made before sentencing.
Government’s crackdown on covid-19 fraud
The sentencing comes as part of a broader federal crackdown on pandemic-related fraud. The U.S. government established the COVID-19 Fraud Enforcement Task Force in 2021 to investigate and prosecute individuals who took advantage of emergency relief programs.
“We will not tolerate those who exploit programs designed to support small businesses, and these defendants are now facing the consequences for their actions,” said FBI Special Agent in Charge Steve Jensen.
“The FBI remains committed to identifying, investigating, and holding accountable those who attempt undermine our financial institutions for personal gain,” Jensen added.
The PPP and EIDL programs were created to provide critical financial support to businesses during the economic uncertainty caused by the COVID-19 pandemic. Fraudulent claims like those submitted by the Chan brothers divert resources away from legitimate businesses and disrupt efforts to stabilize the economy.
Serious legal consequences
While the pandemic relief programs helped countless businesses survive during an unprecedented economic crisis, they also became a target for opportunistic fraudsters. The sentencing of the Chan brothers sends a clear message: those who attempt to manipulate and defraud these programs will face serious legal consequences.
As the government continues to tighten oversight and pursue fraud cases, businesses and individuals tempted by similar schemes should take note—misusing taxpayer funds meant for economic relief is a gamble that could end in federal prison.
