Indictment — United States v. Kurt Sieu Ly, Northern District of West Virginia (Document 2)

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An Indictment filed March 3, 2026 as Document 2 in Case 1:26-cr-00016-TSK-MJA in the United States District Court for the Northern District of West Virginia, charging Kurt Sieu Ly with violations of 18 U.S.C. § 1343. Counts One and Two (Wire Fraud) allege a scheme from on or about April 14, 2020 until on or about June 9, 2022 to defraud the United States, through the SBA, and charge internet transmissions of PPP loan forgiveness applications on June 15, 2021 and June 9, 2022. The indictment describes a first draw PPP loan of $21,500.00 and a second draw PPP loan of $29,766.00, along with an EIDL loan. Its forfeiture allegation states that the government will seek a money judgment of at least $197,766.00.

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“Indictment — United States v. Kurt Sieu Ly, Northern District of West Virginia (Document 2).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-usa-v-ly-dkt-2-n-d-w-va-71b18e157f/, SHA-256 5f17072e9fde39c317a45772d1f5651a070fad29728816274882120635f2b6ba.

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Case 1:26-cr-00016-TSK-MJA Document 2 Filed 03/03/26 Page 1 of 7 PageID #: 2

UNITED STATES DISTRICT COURT FOR THE ft~j)
NORTHERN DISTRICT OF WEST VIRGINIA M
032026
C~4R!~CTc()Lt~

UNITED STATES OF AMERICA,

Criminal No. 1.’ ~ Q~Q-’ ILe

v. Violations: 18 U.S.C. § 1343

KURT SIEU LV,

Defendant.

INDICTMENT

The Grand Jury charges that:

ll’4TRODUCTION

At all times relevant to this Indictment:

1. The defendant, KURY SIEU LV, was a resident of Morgantown, in Monongalia

County, West Virginia, within the Northern District of West Virginia.

2. Vinh Phat, Inc.is a West Virginia business corporation formed in or about 1994 that

operated a restaurant called Peking House.

The COVID-19 Pandemic and the CARES Act

3. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal

law enacted on or about March 2020, designed to provide emergency financial assistance to the

millions who were suffering the economic effects caused by the COVID- 19 pandemic.

4. Among other relief efforts, the United States sought to provide financial support to
Case 1:26-cr-00016-TSK-MJA Document 2 Filed 03/03/26 Page 2 of 7 PageID #: 3

eligible businesses that could be used to offset certain business expenses.

5. The Small Business Administration (“SBA”) is an executive branch agency of the

United States government that provides support to entrepreneurs and small businesses. The SBA

is headquartered in Washington, D.C. and maintains its computer servers outside of the State of

West Virginia. The SBA’s mission is to maintain and strengthen the nation’s economy by enabling

the establishment and viability of small businesses and by assisting in the economic recovery of

communities after disasters.

6. As part of this effort, the SBA enabled and provided for loans through banks, credit

unions, and other lenders. These loans have government-backed guarantees.

The Paycheck Protection Program

7. One of the loans created was the Paycheck Protection Program (“PPP”) loan. This

program provided loans to small businesses for job retention and certain other expenses.

8. To obtain a PPP loan, a qua1if~’ing business had to submit a PPP loan application

signed by an authorized representative of the business. The PPP loan application required the

business (through its authorized representative) to acknowledge the program rules and make

certain affirmative certifications in order to be eligible to obtain the PPP loan. One requirement is

that the business had to be in operation as of February 15, 2020. In the PPP loan application, the

small business (through its authorized representative) had to state, among other things, its average

monthly payroll expenses and number of employees. These figures were then used to calculate

the amount of money the small business was eligible to receive under the PPP. In addition, a

business applying for a PPP loan had to provide documentation showing its payroll expenses.

9. A PPP loan application must be processed by a participating lender, such as a

financial institution. If a PPP loan is approved, the participating lender funds the PPP loan using
Case 1:26-cr-00016-TSK-MJA Document 2 Filed 03/03/26 Page 3 of 7 PageID #: 4

its own monies, which are 100% guaranteed by the SBA. Data from the application, including the

information about the borrower, the total amount of the loan, and the listed number of employees,

is transmitted by the lender to the SBA in the course of processing the loan.

10. The PPP loan proceeds must be used by the business on certain permissible

expenses — payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and

principal of the PPP loan to be entirely forgiven if the business spends the loan proceeds on these

expense items within a designated period of time and uses a certain percentage of the PPP loan

proceeds on payroll expenses.

11. PPP loan applications were electronically submitted or caused to be submitted by

the borrower and received through SBA servers located in Virginia through January 10, 2021 and

after January 11, 2021 through SBA servers located in Oregon. Once approved, the business

received the PPP loan proceeds via an electronic funds transfer from the third-party lender to a

financial account under the control of the business.

The Economic Injury Disaster Loan Program

12. The second source of relief provided by the CARES Act was the expansion of an

existing disaster-related program, the Economic Injury Disaster Loan (“EIDL”) Program. The

EIDL Program was an SBA program designed to provide economic relief to eligible small

businesses that were experiencing substantial financial disruption due to the COVID-19 pandemic.

Through the EIDL Program, the CARES Act authorized the SBA to provide working capital in the

form of low interest, long-term loans

13. To obtain an EIDL loan, a qualifying business was required to submit an application

to the SBA and provide information about its operations, such as the number of employees and

gross revenues for the 12-month period preceding the date of the disaster (January 31, 2020).
Case 1:26-cr-00016-TSK-MJA Document 2 Filed 03/03/26 Page 4 of 7 PageID #: 5

Applicants certified that all the information in the application was true and correct to the best of

their knowledge.

14. EIDL applications were submitted directly to the SBA. The amount ofthe loan was

determined, in part, on the information provided by the applicant, including information about

gross revenues, as described above.

15. Any funds issued under an EIDL loan were issued directly from the United States

Treasury. EIDL funds could be used for working capital to pay fixed debts, payroll, accounts

payable, and other necessary business obligations that could not be met as a direct result of the

disaster.

16. EIDL loan applications were electronically submitted or caused to be submitted by

the borrower and received through the SBA servers located in Iowa.

PPP and EIDL Loans

17. On or about April 14, 2020, KURT SIEU LY submitted an application for a first

draw PPP loan through United Bank, reporting that he employed 14 individuals and that his

average monthly payroll was $8,618.04. As a result of those representations, KURT SIEU LY

was awarded a loan in the amount of $21,500.00.

18. On or about July 20, 2020, KURT SIEU LY submitted an application for an EIDL

loan, reporting a gross revenue of $414,952.00 and costs of goods sold as $121,757. On August

5, 2020, KURT SIEU LY signed the Loan Authorization and Agreement. As a result of this

agreement, on March 11, 2021, KURT SIEU LY received $146,500 from the SBA into his United

Bank account ending in x8344. In his loan agreement, KURT SIEU LV acknowledged that he

would only use the loan proceeds for working capital and that it would not be used for personal,

family, or household purposes.
Case 1:26-cr-00016-TSK-MJA Document 2 Filed 03/03/26 Page 5 of 7 PageID #: 6

19. On or about March 10, 2021, KURT SIEU LY completed an application for a

second draw PPP loan at United Bank. KURT SIEU LY reported that his monthly payroll was

$8,504.72 and that he had 7 employees. KURT SIEU LY reported his business suffered a more

than 25% reduction in gross receipts due to the pandemic. As a result of those representations

KURT SIEU LV received a PPP loan of $29,766.00.

20. On or about June 15, 2021, KURT SIEU LY’s first draw PPP loan was forgiven,

based on his affirmation that he used the entire amount of his first draw PPP loan for payroll

expenses.

21. On or about June 9, 2022, KURT SIEU LY’s second draw PPP loan was forgiven

based on his affirmation that he used the entire amount of his second draw PPP loan for payroll

expenses.

COUNT ONE AND TWO
(Wire Fraud)

22. Paragraphs 1 through 21 of this Indictment are hereby realleged as if fully set forth

herein.

The Scheme to Defraud

23. Beginning in or about April 14, 2020 and continuing until in or about June 9, 2022,

defendant KURT SIEU LV knowingly devised, intended to devise and participated in a scheme

and artifice to defraud the United States, through the SBA, by obtaining funds by means of

materially false and fraudulent pretenses, promises, and representations, and for the purpose of

executing the scheme, did knowingly make and cause to be made, wire communications in

interstate commerce.
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24. The purpose of the scheme and artifice was for KURT SIEU LY to obtain money

and to eliminate his debt by obtaining forgiveness of his PPP loans under false and fraudulent

pretenses and by making false representations regarding the use of the PPP funds.

25. It was part of the scheme that KURT SIEU LY used the money obtained through

PPP loans for his personal expenses, including investments in foreign companies.

26. It was part of the scheme that KURT SIEU LY affirmed, under penalty of perjury,

that the entire amount of the loan was used for payroll costs, despite KURT SIEU LY’s use of the

money for investments and personal expenses unrelated to Peking House.

27. On or about the dates specified as to each count below, in Morgantown, in

Monongalia County, in the Northern District of West Virginia, KURT SIEU LY did knowingly

transmit or cause to be transmitted by means of wire communications in interstate commerce, the

following writings, signs, signals, pictures, and sounds.

Count Date Description
1 June 15, 2021 An internet transmission originating from West Virginia to the
SBA server in Oregon constituting a false and fraudulent
application for forgiveness of a PPP loan
2 June 9, 2022 An internet transmission originating from West Virginia to the
SBA server in Oregon constituting a false and fraudulent
application for forgiveness of a PPP loan

In violation of Title 18, United States Code, Section 1343.
Case 1:26-cr-00016-TSK-MJA Document 2 Filed 03/03/26 Page 7 of 7 PageID #: 8

FORFEITURE ALLEGATION

Wire Fraud

1. Pursuant to Title 28, United States Code, Sections 2461(c), Title 18 United States

Code, Sections 981(a)(1)(C), 1956(c)(7)(A), and 1961(1) and Title 21, United States Code, Section

853, the government will seek the forfeiture of property as part of the sentence imposed in this

case, that is, the forfeiture of any property, real or personal, which constitutes or is derived from

proceeds traceable to a violation of Title 18, United States Code, Section 1343, or a conspiracy to

violate such offense, including a money judgment in the amount of at least $197,766.00.

2. Pursuant to Title 28, United States Code, Section 246 1(c), the government will seek

forfeiture of substitute property up to the value of property subject to direct forfeiture that is not

available for forfeiture on account of any act or omission contemplated by Title 21, United States

Code, Section 853(p)(1).

A true bill,

Is’
Foreperson

Is’
MATTHEW L. HARVEY
United States Attorney

Jennifer T. Conklin
Assistant U.S. Attorney

Morgan McKee
Assistant United States Attorney

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