David T. Hines, Wire Fraud, Florida 2023

MIAMI, FL - A Miami man was sentenced to over six years in prison for fraudulently obtaining approximately $3.9 million in Paycheck Protection Program (PPP) loans and using those funds, in part, to purchase a $318,000 Lamborghini luxury car for himself.

David T. Hines, 29, of Miami, pleaded guilty to one count of wire fraud on February 10. According to court documents, Hines submitted multiple PPP applications to a PPP-participating lender, claiming to have had dozens of employees and millions of dollars in monthly payroll.

In addition to submitting false and fraudulent IRS forms to support the applications, Hines also assisted other individuals in obtaining fraudulent PPP loans. As part of the sentence, the court ordered Hines to forfeit the $3.4 million in fraudulent loan proceeds that law enforcement seized and the 2020 Lamborghini Huracan that Hines purchased for approximately $318,000.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

Hines was sentenced to 78 months in prison for his role in the PPP loan scam. The FDIC-OIG, U.S. Postal Inspection Service, IRS-CI, SBA-OIG, and the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection OIG investigated the case. Trial Attorney Emily Scruggs of the Criminal Division's Fraud Section and Assistant U.S. Attorney Michael Berger of the Southern District of Florida prosecuted the case. Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture.

Source: https://www.justice.gov/archives/opa/pr/florida-man-sentenced-after-fraudulently-obtaining-39-million-ppp-loans