Charleston restaurant owners jailed for COVID fraud scheme

CHARLESTON, S.C. (WCBD) – Three brothers have been sentenced to federal prison for their roles in a $2.8 million COVID fraud scheme, these brothers operate a string of restaurants in the Charleston area.

William Chan, 40, and Siu Chan, 32, both of Georgia, have pleaded guilty to wire fraud conspiracy. The third brother, Ka Ho Chan, 33, who also resides in Georgia, pleaded guilty to two counts of wire fraud. 

Officials say evidence obtained in the investigation revealed that beginning in March 2020, the C Chan brothers applied Paycheck Protect Program (PPP) and Emergency Injury Disaster Loans (EIDL) funds using false representations and fraudulent documentation.

Evidence for William and Siu Chan revealed that at least 22 PPP and EIDL loans were applied for and received totaling more than $2.5 million. According to the U.S. Attorney’s Office, 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.

Ka Ha Chan entered a plea regarding a separate charge of wire fraud connected to an EIDL loan and grant he received. In his plea agreement, he agreed to a restitution amount between $300,000 and $350,000, which is based on the fraudulent loan proceeds obtained through applications submitted by his brothers during their conspiracy.

Officials say 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.

William Chan was sentenced 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. Officials report the total amount of fraudulent loans and misuse of EIDL and PPP loan funds during sentencing exceeded $2.8 million. The outstanding restitution owed in the amount of $1,268,386.50 was ordered to be payed by the brothers.