A Florida man has been arrested after allegedly scamming $3.9 million from the US government's Paycheck Protection Program and blowing the money on various luxury items, including a $318,000 Lamborghini.
The Paycheck Protection Program was set up during the CoVid-19 lockdown to help out workers and businesses that could no longer operate due to the pandemic. It is believed that 29 year-old David T. Hines used this program to apply for $13 million worth of assistance for a variety of companies.
The small business owner allegedly applied for assistance for up to 70 fictional employees and for his existing companies where the turnover was far smaller than what he claimed. Of the $3.9 million fraudulently claimed some $3 million was still sitting in his bank account and was recovered.
The US Department of Justice in a statement outlined the details of the case:
"A Florida man was arrested and charged with fraudulently obtaining $3.9 million in Paycheck Protection Program (PPP) loans and using those funds, in part, to purchase a sports car for himself. Authorities seized a $318,000 sports car and $3.4 million from bank accounts at the time of arrest."
Bryan Masmela, of the U.S. Postal Inspector added:
"Those purported employees either did not exist or earned a fraction of what Hines claimed in his PPP applications. Collectively, Hines falsely claimed his companies paid millions of dollars in payroll in the first quarter of 2020. State and bank records, however, show little to no payroll expense during this period."
Hines has now been charged with a series of crimes including bank fraud and engaging in transactions with unlawful proceeds and will stand trial at a later date.
Both individual fraudsters and organised crime have sought to make capital out of the crisis engaging in everything from false government assistance applications, to stealing and selling personal protective equipment, to selling miracle cures online.
Hines is hardly the first US citizen to be caught defrauding the program. A 52 year-old man, David Staveley, was arrested recently after faking his own death to escape a $500,000 fraud related to the same Paycheck Protection Program.
Many law enforcement agencies believe that the crime problem caused by the pandemic will only get worse as time goes on due to the emerging mass unemployment and fall in income felt by citizens across the world. The fear is that many who would not normally be involved in crime will fall into the hands of gangsters as a way of making ends-meet or descend into drug addiction due to the psychological impact of the pandemic.
It has been reported by the BBC that in Southern Italy, many of the government's usual functions such as, providing food and assistance to those in need have already largely been taken over by mafia gangs, which may provide a pipeline for more recruits and victims in the future.
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