Federal lawmakers have approved the expenditure of trillions of dollars in taxpayer cash to shore up the economy amid the COVID-19 pandemic.
With all that money pouring out — a trillion dollars in one-dollar bills stacked up would reach 67,866 miles high, more than a quarter of the way to the moon — how to oversee who got what is clearly a problem.
But the feds are apparently watching closely.
On Monday, a Florida man was arrested, with federal prosecutors saying he “fraudulently” obtained $3.9 million in Paycheck Protection Program (PPP) loans, which set aside at least $650 billion to help small businesses. It gets worse: He allegedly used some of the money to buy a Lamborghini sports car for more than $300,000.
David Hines, 29, of Miami, has been charged with bank fraud, making false statements to a financial institution and engaging in transactions in unlawful proceeds, the Department of Justice (DOJ) announced in a press release on Monday.
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 caused to be 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.
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.
PPP loans are allowed for qualifying small businesses and other organizations, but they must use the loans 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,” the DOJ said.
In his loan applications, Hines said the money would be spent on at least 70 employees with a monthly payroll of $4 million, the DOJ said. But then he allegedly spent thousands of dollars on dating websites, jewelry and clothes, as well as stays at posh hotels in Miami Beach, the complaint said.
Federal investigators linked the sports car to Hines after he was involved in a hit-and-run incident on July 11, The Miami Herald reported.
“Miami police impounded his car, and now prosecutors plan to seize it,” The Herald reported. “Hines, 29, held over the weekend at the Federal Detention Center, was granted a $100,000 bond by Magistrate Judge John O’Sullivan and will be allowed to stay at his mother’s home with a GPS monitor. His defense attorney, Chad Piotrowski, declined to comment after Monday’s hearing. Hines’ arraignment is scheduled for Oct. 14.”
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