A Brentwood man has been sentenced to 37 months in prison for fraudulently obtaining over a quarter of a million dollars in COVID-19 relief funds to support an unlicensed marijuana distribution business, according to the Department of Justice (DOJ).
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Thanh Duy Nguyen, 53, served as the sole officer of T&A Distribution, an unlicensed interstate marijuana trafficking operation with multiple grow houses across the Bay Area.
Fraudulent Loan Applications
The DOJ revealed that Nguyen used his fraudulent business to secure two Economic Injury Disaster Loans (EIDL) through the U.S. Small Business Administration (SBA). These loans were intended to assist small businesses experiencing financial hardship due to the pandemic.
Nguyen initially applied for the first loan in April 2020, falsely certifying that T&A Distribution was a nonprofit organization dealing in antiques and collectibles. He also misrepresented the company’s gross revenue and employee count, claiming the business earned approximately $2.4 million in the year leading up to January 31, 2020.
In June 2020, Nguyen submitted a second EIDL application, again falsely identifying T&A Distribution as a nonprofit in the business of miscellaneous services. Authorities confirmed he exaggerated revenue figures, operational costs, and employee numbers to obtain funds.
Misuse of Funds
Prosecutors stated that Nguyen received roughly $300,000 in relief funds. Instead of using the funds as intended, he diverted a significant portion to finance his marijuana distribution operation and gambling activities.
Legal Consequences
Nguyen pleaded guilty to two counts of wire fraud and was sentenced to 37 months in federal prison. He will also serve three years of supervised release and is required to pay $300,000 in restitution along with $300,000 in forfeiture.
Nguyen’s sentencing date has been set for February 28 of next year.
Broader Implications
The case highlights ongoing efforts by authorities to crack down on fraud related to pandemic relief programs, particularly when funds are misused for illegal activities. Officials stress the importance of safeguarding government resources and holding offenders accountable for exploiting financial aid designed to support struggling businesses.
This incident also underscores the need for stricter oversight and verification processes within relief programs to prevent misuse and ensure funds are distributed to legitimate applicants.
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