SAN FRANCISCO – A Brentwood man was sentenced to 37 months in prison for defrauding the United States by obtaining approximately $300,000 in COVID-19 relief funds for his “nonprofit” that was an unlicensed marijuana distribution business.
The sentence was handed down by the Honorable Rita F. Lin, U.S. District Judge, following defendant’s guilty plea on two counts of wire fraud.
According to court documents, Thanh Duy Nguyen, 53, ran and was the sole officer of T&A Distribution, an unlicensed interstate marijuana trafficking scheme with grow houses around the Bay Area. Nguyen used T&A Distribution to obtain two Economic Injury Disaster Loans (EIDL) from the U.S. Small Business Administration (SBA). The Coronavirus Aid, Relief, and Economic Security Act authorized the SBA to provide EIDL loans to small businesses experiencing substantial financial disruption due to the COVID-19 pandemic.
In the first application, which he submitted in April 2020, Nguyen certified that he was not engaged in any illegal activity as defined by federal law, even though he knew that his marijuana distribution business was illegal under federal law. Nguyen fraudulently claimed that T&A Distribution was a nonprofit in the business of “Antiques/Collectibles,” when its business was marijuana distribution. Nguyen also made other false statements, including about T&A Distribution’s gross revenue and employee count. The true amount of T&A Distribution’s gross revenues in the 12 months before Jan. 31, 2020, was approximately $2.4 million.
On a second EIDL application, which he submitted in June 2020, Nguyen again falsely certified that he was not engaged in any illegal activity as defined by federal law, and misrepresented T&A Distribution as a nonprofit in the business of “Miscellaneous Services.” He also made false statements about the business’s gross revenues, cost of operations, and employee count.
As a result of the falsified applications, Nguyen received approximately $300,000 in EIDL funds. He used a significant amount of the loan funds for his marijuana distribution business and for gambling.
In addition to the term of imprisonment, Judge Lin sentenced Nguyen to three years of supervised release and to pay $300,000 in restitution and $300,000 in forfeiture. Nguyen will begin serving his sentence on Feb. 28, 2025.
United States Attorney Ismail J. Ramsey, Drug Enforcement Administration (DEA) Special Agent in Charge Bob P. Beris, and SBA Office of Inspector General (OIG) Special Agent in Charge of the Western Region Weston King made the announcement.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Assistant United States Attorney Joseph Tartakovsky prosecuted the case with the assistance of Sara Slattery. The prosecution is the result of an investigation by DEA and SBA OIG.
H/T: contracosta.news
