Florida man spends Paycheck Protection Program money on Lambourghini, jewelery and hotels

Indus

Diamond Member
May 11, 2002
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A man in Miami, Florida, has been charged with bank fraud for allegedly lying on PPP loan applications and spending the money on luxury items such as a Lamborghini Huracán EVO, federal authorities say.
Funds from the $521 billion Paycheck Protection Program are destined for small businesses so that they're able to keep workers on payroll throughout the coronavirus pandemic.

David Tyler Hines, 29, not only filed fraudulent PPP applications, but also spent the money on a $318,497.53 Lamborghini Huracán EVO and other "luxury and personal items," including nearly $5,000 at Saks Fifth Ave, more than $11,000 at two Miami-area hotels and a $8,530 purchase at Graff Diamonds, investigators say.

"There does not appear to be any business purpose for most, if not all, of these expenses," the criminal complaint reads.

Bank records obtained by US Postal investigators show Hines got almost $4 million in taxpayer dollars through three low-interest, forgivable PPP loans. He had initially requested $13.5 million in seven PPP loan applications, claiming his four companies needed the funds to continue paying employees.

"Those purported employees either did not exist or earned a fraction of what Hines claimed," US Postal Inspector Bryan Masmela wrote in the complaint.

The charging document went on to note that customers have claimed on the Better Business Bureau website that two of Hines' companies used, "bait-and-switch practices and other deceitful activities."
Also, one of those companies had not filed its mandatory annual report with Florida's Department of State in two years.




So what are the chances Trump will pardon this guy? 100%?
 
Jun 19, 2004
24,126
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How about going after whoever ok'd the four million after the original amount was declined? Did someone think he was just a little overzealous?
 

dawp

Diamond Member
Jul 2, 2005
9,909
1,234
126
he should have waited, held onto the cash for a few years then went on his spending spree. less likely to draw notice.
 

sdifox

No Lifer
Sep 30, 2005
79,560
7,065
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I thought it's a loan? Was he planning to declare bankruptcy afterwards?
 

GoodRevrnd

Diamond Member
Dec 27, 2001
6,698
404
126
What's really aggravating is that's $4mm that didn't go to very small business that didn't have the resources, banking connections, etc. to process in time before clowns like this gobbled up all the funds. And now they're probably gone.
 

Aikouka

Lifer
Nov 27, 2001
29,315
405
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I thought it's a loan? Was he planning to declare bankruptcy afterwards?
I was talking with some friends today that have small businesses about these loans. They weren't 100% sure about all of the details in regard to the PPP loans; however, the idea was that if the loans were used for payroll and you retained your workers, your loan could be forgiven. Although, they seemed to suggest that the forgiveness depended on the amount of the loan, so I'm not sure how it works (i.e. based on the number of employees?).

One thing they did mention was that even if you don't use it for that, the interest rate is so good that it's worthwhile to get the loan anyway. They were saying how it was only something around 1%, which is far better than any sort of personal loan that you could get.

Although, the one thing that no one knew about is whether forgiveness meant the money counted as business revenue.
 

GoodRevrnd

Diamond Member
Dec 27, 2001
6,698
404
126
I was talking with some friends today that have small businesses about these loans. They weren't 100% sure about all of the details in regard to the PPP loans; however, the idea was that if the loans were used for payroll and you retained your workers, your loan could be forgiven. Although, they seemed to suggest that the forgiveness depended on the amount of the loan, so I'm not sure how it works (i.e. based on the number of employees?).

One thing they did mention was that even if you don't use it for that, the interest rate is so good that it's worthwhile to get the loan anyway. They were saying how it was only something around 1%, which is far better than any sort of personal loan that you could get.

Although, the one thing that no one knew about is whether forgiveness meant the money counted as business revenue.
Qualification amount was based on payroll (capped at $100k annual rate / ee) over some period, reduced by any labor reductions during the period. Forgiveness was based on payroll in a subsequent 8-week period plus rent and utilities, reduced by any labor reductions in that period. There was also no needs based testing, you only needed to attest your business was negatively impacted by covid. And yes, interest rate was in the 0.5%-1% range, so you'd be insane not to take it even if you don't immediately need it because that's super cheap insurance to stay afloat for the rest of the year.

Forgiveness treatment is fuzzy. GAAP it's just Other Income. Tax guidance... well the statute says it doesn't count as gross income but the IRS is also says expenses covered by forgiveness are not deductible, so the effect is essentially the same as income. This could put some pass-through entities in a tight spot. We'll see if congress passes further legislation to address this.
 

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