By a Biometrica staffer
David T Hines of Miami fraudulently obtained $3.9m in Paycheck Protection Program (PPP) loans and used part of these funds to buy himself a Lamborghini Huracan sports car worth $318,000. At the time of his arrest, the car was seized along with $3.4m in bank accounts. Hines, 29, pled guilty to one count of wire fraud and is scheduled to be sentenced on Apr. 14.
Plea documents indicate that in the days and weeks following the disbursement of PPP funds, Hines did not make payroll payments that he claimed on his loan applications. Instead he used the funds to buy luxury jewelry, expensive clothes, pay for visits to resorts in Miami Beach and expenses on dating websites. Hines paid $4,000 to Saks Fifth Avenue. In June, Mr. Hines paid more than $7,000 to the Setai Hotel in Miami Beach, and $8,500 to the jewelry company Graff.
On his applications, Hines claimed to operate four businesses with 70 employees and claimed he had $4m in monthly expenses. Hines received three payments totaling $3,984,557 and submitted requests for funds totaling $13,542,741.
As part of his guilty plea, Hines admitted that he fraudulently sought millions of dollars in PPP loans through applications to an insured financial institution on behalf of different companies. Hines caused to be submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ respective payroll expenses.
“There does not appear to be any business purpose for most, if not all, of these expenses,” Bryan Masmela, a U.S. postal inspector, wrote in an affidavit. Masmela added that was no record of Mr. Hines’s businesses — Unified Relocation Solutions LLC, Promaster Movers Inc., Cash In Holdings LLC and We-Pack Moving LLC — having “any operating websites.”
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.
One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding, and in December 2020, Congress authorized another $284 billion in additional funding.
The Fraud Section leads the prosecution of schemes that exploit the PPP. In the months since the CARES Act passed, more than 100 defendants have been prosecuted in over 70 criminal cases with $60m being seized.