Man arrested after buying expensive Lamborghini car from coronavirus aid meant to bailout businesses
David T Hines from Florida in the United States was given a loan of nearly $4 million meant to bailout businesses affected by the coronavirus pandemic, from the federal Paycheck Protection Program (PPP) on May 13 after his corporate bank account sunk was in debt of more than $30,000. But unfortunately, within a week of getting the money, the the 29-year-old was seen cruising around Florida’s Miami Beach, in a new luxurious blue Lamborghini Huracan Evo, which has a price tag of more than $318,000. This is according to a report in The Washington Post.
Meanwhile the US Justice Department announced Monday that he was arrested and charged with making false statements to a lending institution, bank fraud, and engaging in transactions in unlawful proceeds, officials told Washington Post.
According to federal prosecutors, it has been discovered that Hines illegally used hundreds of thousands of dollars in PPP loans meant for his moving companies to buy the car as well as a host of personal expenses, including shopping sprees and high-end hotel stays, instead of covering his companies’ payroll.
A U.S. Postal inspector, Bryan Masmela, said in an affidavit, “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.”
Millions of business owners sought for government help when the novel coronavirus affected the US economy and Hines was among them. The Cares Act, the $2 trillion coronavirus bill signed into law in late March, included $349 billion in forgivable loans for small businesses to maintain operating expenses, such as payroll. Congress added an additional $310 billion in funding in April.
In fact, the arrest of Hines is the latest case of alleged fraud in relation to the program, with business owners inflating employee numbers and claiming higher operating costs. Some even claimed loans for defunct companies. Federal prosecutors have filed numerous charges, including against reality star Maurice “Mo” Fayne, who allegedly spent his funds on a Rolls-Royce and $85,000 in jewelry.
Washington Post analysis also found that data from the Small Business Administration recorded that far more American workers were “retained” thanks to the loans allocated to the businesses than there were actual employees, calling into question the Trump administration’s claim that PPP loans helped support 51 million jobs.
The man Hines first submitted applications for seven businesses, requesting more than $13.5 million worth of loans from a bank in Charlotte, prosecutors said. The bank approved three of the applications for $3.9 million and began sending the funds on May 11.
He claimed to own and operate a handful of moving companies, but Masmela said that authorities “found no record of any operating websites” for those businesses. Hines also falsely claimed he had 70 employees, prosecutors said.
According to the Prosecutors, his payroll costs were far less than he claimed.
Speaking further Masmela said, “A review of Hines Companies Accounts from January through April of 2020 shows monthly inflows averaging around $200,000 – far less than the millions of dollars in payroll that Hines sought in the PPP application,”.
The prosecutors also disclosed that Hines did not take long to exploit the funds for his own enjoyment. On May 18, just five days after receiving a deposit for almost $750,000 in one of the bank accounts, Hines allegedly wired $320,000 for the Lamborghini, registering the car under both his name and one of the companies that received a PPP loan.
More disclosures indicated that between May and June, Hines also spent the funds on a $4,600 shopping spree at Saks Fifth Avenue. In addition to ride-hailing apps, food delivery services and dating websites, Hines spent thousands on luxury hotels as well as more than $8,500 worth of jewelry, prosecutors allege.
In the affidavit Masmela also said, “There does not appear to be any business purposes for most, if not all, of these expenses,”.