Federal authorities announced Monday that they had arrested and charged David T. Hines of Miami, Florida, with three felonies after he allegedly spent millions in coronavirus relief loans on lavish purchases, including a Lamborghini Huracán.
According to Fox News, Hines may have received as much as $13.5 million from a Paycheck Protection Program loan. The Department of Justice claims that Hines stated on his application that he owned four companies with 70 employees and had approximately $4 million in monthly expenses.
The government claims that Hines received three payments from the program, but did not actually dole out any payroll expenses. Hines did, however, allegedly purchase for himself a number of luxury items, including the aforementioned Lamborghini, and reportedly had $3.4 million in his bank account. The government claims that Hines' actual business expenses totaled around $200,000 a month, and an affidavit submitted with the government's charging documents claimed, "There does not appear to be any business purpose for most, if not all" of the money spent by Hines.
According to a statement from the Department of Justice, "In the days and weeks following the disbursement of PPP funds, the complaint alleges that Hines did not make payroll payments that he claimed on his loan applications. He did, however, make purchases at luxury retailers and resorts in Miami Beach."
Hines has been charged with three felonies: bank fraud, making a false statement to a lending institution, and engaging in transactions in unlawful proceeds. He faces up to 70 years in prison if convicted.
Hines' attorney, Chad Piotrowski, strongly denied the charges and told Fox News that Hines is a legitimate business owner who "suffered financially during the pandemic."
To date, the Treasury Department has doled out over $500 billion in funds under the Paycheck Protection Program. The program was created by the CARES Act, which was passed by Congress and signed into law by President Donald Trump in March as a means of protecting the economy from total collapse due to the economic impact of the shutdowns imposed by the coronavirus pandemic. The program provided forgivable loans to companies that met certain conditions. Companies that received PPP funds were generally required to keep their employees on payroll as a condition of receiving the loan.
The Treasury Department faced enormous pressure to get PPP funds into the hands of business owners as quickly as possible, which may have led to widespread fraud and abuse of the program. The allegations against Hines are not unique. Numerous other reports have begun to trickle in regarding waste, fraud, and abuse in the program.
For example, KPIX-TV in San Francisco reported last week on a number of individuals and companies that appear to have abused the PPP system.