MIAMI BEACH, Fla.–In a precursor to what surely will be additional such revelations, a Florida man who had been deeply in debt has been arrested after receiving nearly $4 million in funds from the Paycheck Protection Program and after buying a new blue Lamborghini Huracán Evo, which cost more than $318,000.
Federal prosecutors said David T. Hines, who prior to receiving the PPP funds was in the red by more than $30,000, illegally used hundreds of thousands of dollars in PPP loans meant for his moving companies to buy the car and to cover personal expenses, including shopping sprees and high-end hotel stays, instead of covering his companies’ payroll.
The Justice Department said Hines has been arrested and charged with making false statements to a lending institution, bank fraud and engaging in transactions in unlawful proceeds.
“Collectively, Hines falsely claimed his companies paid millions of dollars in payroll in the first quarter of 2020,” Bryan Masmela, a U.S. Postal inspector, said in an affidavit as quoted by the Washington Post. “State and bank records, however, show little to no payroll expense during this period.”
Just the Latest Arrest
The Washington Post reported Hines is just the latest person to be arrested for alleged fraud related to the PPP, which has provided mor than $500 billion in loans that are to be forgiven if certain criteria are met. The Post noted some business owners have inflated employee numbers, claimed higher operating costs, claimed loans for defunct companies, along with other allegations.
An analysis from The Washington Post 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.
In the Hines case, prosecutors allege he 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.
Hines claimed to own and operate a handful of moving companies, but prosecutors said that authorities “found no record of any operating websites” for those businesses. Hines also falsely claimed he had 70 employees, prosecutors said.
Prosecutors said his payroll costs were far less than he claimed.
‘It Didn’t Take Long’
“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,” prosecutors said.
According to the Post, “it didn’t take long for Hines to exploit the funds for his own enjoyment, prosecutors said. 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.”