A Florida man was arrested and charged with fraudulently obtaining $3.9 million in Paycheck Protection Program (PPP) loans and using those funds, in part, to purchase a sports car for himself.
David T. Hines, 29, of Miami, Florida, was charged by criminal complaint, unsealed today upon his initial appearance before U.S. Chief Magistrate Judge John J. O'Sullivan in the Southern District of Florida.
Charges against David:
- One count of bank fraud.
- One count of making false statements to a financial institution.
- One count of engaging in transactions in unlawful proceeds.
- Fraudulently secured $13.5 million in PPP loans
- Bought a 2020 Lamborghini Huracan for approximately $318,000.
The complaint alleges that Hines sought approximately $13.5 million in PPP loans through applications to an insured financial institution on behalf of different companies. The complaint alleges that Hines submitted fraudulent loan applications that made numerous false and misleading statements about the companies' respective payroll expenses. The financial institution approved and funded approximately $3.9 million in loans.
What he did after fraudulently getting the loan:
The complaint further alleges that within days of receiving the PPP funds, Hines purchased a 2020 Lamborghini Huracan sports car for approximately $318,000, which he registered jointly in his name and the name of one of his companies. In the days and weeks following the disbursement of PPP funds, the complaint alleges that Hines did not make payroll payments that he claimed on his loan applications. He did, however, make purchases at luxury retailers and resorts in Miami Beach.
What is the CARES Act:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act (Donald Trump signed the H.R 748) is a federal law enacted March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
See something? Say something:
The Department of Justice said that anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice's National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
