NEW YORK – A man in Florida who received nearly US$4 million (S$5.5 million) in federal loans intended to help struggling businesses – and spent the money on a new Lamborghini Huracán sports car and other fraudulent purchases – was arrested and charged with three felonies, officials said on Monday (July 27).
David T. Hines, 29, of Miami, was charged with bank fraud, making a false statement to a lending institution and engaging in transactions in unlawful proceeds, according to prosecutors in the US District Court for the Southern District of Florida. If convicted on all charges, he could face up to 70 years in prison, an official in the prosecutor’s office said.
In April, Hines joined scores of other business owners who are seeking financial help from the federal Paycheck Protection Programme, a loan programme created to help businesses keep their employees during the coronavirus pandemic.
On his applications, Hines said he operated four businesses with 70 employees and had US$4 million in monthly expenses.
By the next month, Hines started receiving money from the loan programme. He received three payments totalling US$3,984,557, according to the authorities. As that money came in, Hines continued submitting requests for more funds. Eventually, his requests totalled US$13,542,741, officials said.
What came next, based on a review of Hines’ financial records, was a spending spree that included luxury jewellery, expensive clothes, visits to resorts in Miami Beach and expenses on dating websites, officials said.
“There does not appear to be any business purpose for most, if not all, of these expenses,” Bryan Masmela, a US postal inspector, wrote in an affidavit outlining more than a dozen of Hines’ payments from May to June.
Hines’ lawyer, Chad Piotrowski, said in a statement that his client was “a legitimate business owner who, like millions of Americans, suffered financially during the pandemic” and “is anxious to tell his side of the story when the time comes.” Telephone messages left for Hines were not immediately returned as of Monday night.
Hines made two payments in May totalling US$30,000 to a person listed as “Mom,” officials said. The same month, he paid more than US$4,000 to Saks Fifth Avenue. In June, Hines paid more than US$7,000 to the Setai Hotel in Miami Beach, and US$8,500 to the jewellery company Graff.
The biggest purchase appears to have been made May 18, when Hines bought a blue Lamborghini for US$318,497 in North Miami Beach, officials said. He registered the vehicle under his name and that of one of his businesses.
Monthly expenses for Hines’ companies averaged around US$200,000, far below what he claimed on his federal loan applications, the postal inspector said.
In fact, there was no record of Hines’ businesses – Unified Relocation Solutions LLC, Promaster Movers Inc., Cash In Holdings LLC and We-Pack Moving LLC – having “any operating websites,” according to the affidavit from the postal inspector.
Two of his businesses did have a history of complaints.
On the Better Business Bureau website, customers complained that two of Hines’ businesses conducted “bait-and-switch practices and other deceitful activities,” according to the affidavit. “Both businesses are F-rated businesses on the site.”