MIAMI — A Florida man is accused of fraudulently obtaining a $3.9 million Paycheck Protection Program loan and using part of the funds to buy a $318,000 Lamborghini, the Department of Justice said Monday.
David T. Hines, 29, of Miami, was arrested Friday and 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 DOJ said in a news release.
Authorities seized the sports car and $3.4 million from bank accounts at the time of Hines’ arrest, the statement said. Those expenses were not permissible under a Small Business Administration loan program meant to protect employees during the coronavirus pandemic, the Miami Herald reported. The SBA’s program, totaling nearly $650 billion, was approved by Congress as part of the CARES Act.
The criminal complaint against Hines was unsealed Monday upon his initial appearance before U.S. Chief Magistrate Judge John J. O’Sullivan in the Southern District of Florida.
The complaint alleges that Hines sought approximately $13.5 million in PPP loans through applications on behalf of several companies, the DOJ news release said. The complaint also alleged that Hines submitted fraudulent loan applications that made “numerous false and misleading statements” about the companies’ payroll expenses. Hines was approved for approximately $3.9 million in loans, according to the complaint.
The complaint also alleged that within days of receiving the PPP loan in May, Hines bought a 2020 Lamborghini Huracan for $318,497, which he registered jointly in his name and in the name of one of his companies. The Department of Justice alleges that Hines did not make the payroll payments he claimed on his loan applications, but spent thousands of dollars on dating websites, jewelry and clothes and stayed at high-end hotels such as the Fontainebleau and Setai on Miami Beach, the Herald reported.
According to the PPP loan program, qualifying small businesses and other organizations can receive loans with a maturity of two years and an interest rate of 1%. Businesses are required to use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The program allows the principal and interest to be forgiven if businesses spend the proceeds on those expenses within a set time period and use at least a certain percentage of the loan toward payroll expenses.
Hines will be allowed to stay at his mother’s home with a GPS monitor, the Herald reported. His defense attorney, Chad Piotrowski, declined comment after Monday’s hearing. Hines will be arraigned Oct. 14.
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