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A Florida man was charged Monday with fraud after spending the $3.9 million he received in COVID-19 relief funds to buy a Lamborghini, among other things.

Twenty-nine year old David Hines was arrested on Friday for fraud charges, said the Department of Justice (DOJ). Over $3 million obtained through fraud was seized from his bank account, along with the sports car, according to a report from The Hill.

Hines, who is from Miami, Florida, is also being charged for making false statements to a financial institution and for engaging in transactions involving unlawful proceeds, reported the USA Today.

Authorities claimed that Hines filed a false claim of around $13.5 million under the Paycheck Protection Program (PPP) for a few companies, the Time Magazine said in their report.

The PPP, part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), was enacted on March 29 to help small businesses with the use of forgivable loans. Money given to these companies is meant to be used on rent or mortgage costs, along with worker salaries and other bills.

The DOJ said Hines made false statements about the expenses of the companies. One of those false statements is the amount paid to employees.

In an affidavit, U.S. Postal Inspector Bryan Masmela said the workers either did not exist or did not earn as much as 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," said Masmela in a Miami Herald report.

No Payroll Payments Made

Just a few days after getting the money, Hines bought the $318,000 sports car. He also allegedly bought some luxury items from stores and resorts in Miami Beach. The car is registered under his name and the name of one of his companies.

In the complaint, it noted that Hines did not pay the payrolls that he claimed for his loan applications in the days and weeks that followed the PPP fund payment.

Hines is in federal custody over the weekend. He was released on bond Monday and is set to have an arraignment on October 14.

New PPP Proposals

As the plans on the new stimulus bill roll out, there are some changes done to the PPP.

The Senate answered criticisms on the PPP's limits by adding more expenses that companies can pay for with the PPP, the Forbes reported.

PPP will now cover expenses for:

  • Any software, cloud computing, human resources, billing and others
  • Costs linked to vandalism or property damages "due to public disturbances" in 2020 that are not covered by insurance
  • Supplier costs
  • Worker protection efforts like measures on social distancing, sanitation and other safety requirements.

Businesses can borrow up to 2.5 times their usual monthly payroll costs in a year before the loan, up to $2 million. The new proposal also sets aside $25 billion to companies with 10 or less employees.

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