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David Hines from Florida has been arrested for allegedly securing $3.9 million in PPP which he used for purchasing a $318,000 Lamborghini Huracan.
A man from Florida David Hines has been arrested and charged as he allegedly lied to get $3.9 million COVID-19 relief funds in a PPP check which he used in purchasing a $318,000 Lamborghini Huracan. The emergence of the novel COVID-19 turned many people’s world around.
The fast-spreading disease spiked response from governments around the world including the closure of borders, as well as the enforcement of national lockdowns. The corresponding response by businesses includes closures as operations were hampered. The economic impact of this was unprecedented as businesses were unable to meet cash obligations for sustenance. The cataclysmic effect was felt particularly in the U.S. as millions of people lost their jobs in the first quarter when the lockdown came into effect.
The U.S. government had to step up with a program to help businesses cushion the effect of the coronavirus as its imposed lockdowns continued to take its toll. One such program is the Paycheck Protection Program (PPP), the scheme which has seen many false claims of funds since it was launched.
Role of Paycheck Protection Program in COVID-19
The Paycheck Protection Program (PPP) is a loan package administered by the Small Business Administration (SBA) under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act was enacted on the 29th of March and 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 the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.
Under the PPP, qualifying small scaled businesses and organizations can get access to a loan package spanning two years with a 1 percent interest rate. As a condition, businesses must use the 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. Since it came into effect, more than 650,000 companies have gotten the PPP loan thus far.
How David Hines Used His PPP Check
Charged David Hines is a Miami resident who attempted to get $13.5 million in the PPP check with several companies. He however ended up getting $3.9 million, a sum He put to extravagant use. Besides the $318,000 Lamborghini Huracan, David never made any salary payments as specified in his loan applications but went on luxury trips to make purchases in Miami’s stores. When arraigned, he was 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. The Lamborghini has been confiscated alongside a $3.4 million found in his bank account.
Similar PPP loan related frauds have been recorded in the past months, earlier in the month, a Texas man was also arraigned by the Department of Justice for allegedly fraudulently obtaining more than $1.1 million in Paycheck Protection Program which he invested in cryptocurrencies.
With the possibility of more stimulus package in view, “businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities,” according to the DOJ.