A man from Florida was arrested last week after he was caught scamming the COVID relief fund out of $3.9 million, and spending the money on a variety of different personal items and expenses. 29-year-old David T. Hines fraudulently applied for over $13 million in Paycheck Protection Program (PPP) loans for a few different companies.
The funds were intended to be used for rent or mortgage costs, employee salaries, and utilities, but Hines reportedly went on a shopping spree as soon as he got the money, purchasing a variety of luxury items, including a Lamborghini.
When Hines was arrested last week, over $3 million was seized from his bank account, along with the car and other expensive items he purchased after receiving the money.
In a statement announcing the charges, the US Department of Justice said, “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. Authorities seized a $318,000 sports car and $3.4 million from bank accounts at the time of arrest.”
On his applications, Hines claimed that he had a total of 70 employees with a monthly payroll of $4 million, but according to investigators, most of these employees didn’t exist, and the companies earned far less than was claimed.
According to the Miami Herald, U.S. Postal Inspector Bryan Masmela said that Hines’ companies showed monthly revenue and expenses averaging about $200,000, which is much less than the millions of dollars that he applied for.
“Those purported employees either did not exist or earned a fraction of what Hines claimed in his PPP applications. Collectively, Hines falsely claimed his companies paid millions of dollars in payroll in the first quarter of 2020. State and bank records, however, show little to no payroll expense during this period,” Masmela said.
Hines has been charged with one count of bank fraud, one count of making false statements to a financial institution and one count of engaging in transactions in unlawful proceeds.
Due to the rushed nature of the PPP program and the urgency of the pandemic, the government was sending out funds to pretty much anyone who applied, without checking IRS records first. However, the agency is starting to catch up with many of these scammers as they go back and evaluate which recipients qualify for the loan forgiveness. Numerous cases of PPP scammers have been reported across the country.
52-year-old David Staveley was recently arrested by the U.S. Marshals Service in Alpharetta, Georgia, after he faked his own death to avoid fraud charges for the $500,000 he received from the government through fraudulent PPP loan applications.
Large corporations like Shake Shack and Ruth’s Chris Steakhouse received millions in PPP loans, but were later forced to return the money after a massive public outcry was sparked by their applications. Over 9,000 Catholic churches were approved for the loans as well, even though they are exempt from taxes.
At least 15 people throughout the United States have been charged with fraud relating to PPP loans.
Call that a Lambo? - it's just a cheap one!
Faked his own death.. This sounds like a movie ;) I'm interested in the details. Florida seems like such a crazy place these days haha...