Former Bay Area Restaurateur David Leung Sentenced to Prison for COVID-19 Loan Fraud

By Susana Guerrero,
Food Reporter

David Tai Leung, a former owner of multiple Bay Area Japanese buffets, has been sentenced to 30 months in federal prison for misusing over $3 million in COVID-19 relief loans. Leung, who co-owned Kome Japanese Seafood Buffet in Daly City, Tomi Sushi and Seafood Buffet in San Jose, and Tomi Japanese Seafood Buffet in Concord, was convicted after he fraudulently spent the funds on personal expenses, including luxury car payments and gambling at a casino.

Leung, a Sacramento resident, pleaded guilty in February to three counts of wire fraud. He admitted to using about $3.3 million from the Restaurant Revitalization Fund (RRF) and Paycheck Protection Program (PPP) loans for his own benefit, rather than for the business expenses he had claimed in his loan applications. According to the U.S. Attorney’s Office for the Northern District of California, Leung initially applied for a $5 million RRF loan in May 2021, claiming the funds would be used for payroll, rent, and other business expenses during the pandemic. However, he later transferred $3.5 million of the loan to pay the mortgage on his home in Sacramento.

In addition to the RRF loan, Leung secured two PPP loans, one for $257,100 in 2020 and another for $360,055 in 2021. The U.S. Attorney’s Office revealed that Leung used these funds to make payments at a Lexus dealership and at a casino in Northern California, diverting the relief money away from its intended use to support his business.

Leung’s legal troubles extend beyond the fraudulent loan usage. In 2021, the California Attorney General’s Office charged him, along with his business partners Sunny Siukeung Chan and Wendy Lai Ip, with 65 counts of tax fraud and wage theft. The trio was accused of stealing nearly $900,000 in wages, evading over $287,000 in sales tax, and avoiding about $172,000 in employment taxes. In November 2023, Leung pleaded guilty to eight felony charges related to the tax fraud.

As part of his sentence, Leung has been ordered to pay $3.3 million in restitution to cover the misused COVID-19 relief funds. After serving his 30-month prison sentence, Leung will also be placed under three years of supervised release. This case highlights the continued efforts by authorities to hold individuals accountable for the fraudulent misuse of government relief programs intended to help businesses during the pandemic.