MIAMI – One of the first things David T. Hines bought when he received $ 4 million in COVID-19 aid loans from the government for his allegedly troubled moving company in South Florida was a luxury Lamborghini Huracan Evo, authorities say.
Needless to say, the Italian-made sports car – bought by Hines in May for $ 318,497 – was not on the list of eligible expenses under a Small Business Administration loan program to protect employees and other legitimate expenses like rent during the Coronavirus pandemic should cover.
Hines, who was arrested Friday, also spent thousands of dollars on dating websites, jewelry and clothing, and stays at high-end hotels like the Fontainebleau and Setai in Miami Beach.
The SBA’s payroll protection program, valued at nearly $ 650 billion in total, was approved by Congress under the CARES Act after the coronavirus hit the nation in March, but the Hines case and other similar fraud cases are looming across the country. The PPP loans are issued by the government when used properly by businesses. Congress is considering another major SBA loan infusion as the rampant pandemic continues to hurt the U.S. economy.
Federal investigators have linked the Lamborghini to Hines, who appeared in Miami federal court on Monday on Monday on charges of fraud and other charges after being involved in a July 11 hit-and-run accident. Miami police confiscated his car and prosecutors are now planning to confiscate it.
Hines, 29, who was held in federal prison over the weekend, received $ 100,000 bail from Judge John O’Sullivan and is allowed to stay at his mother’s house with a GPS monitor. His defense attorney Chad Piotrowski declined to comment after Monday’s hearing. Hines’ indictment is scheduled for October 14th.
According to a criminal complaint, the four Hines South Florida moving companies applied for seven SBA loans totaling $ 13.5 million from Bank of America, saying the money would be for at least 70 employees with $ 4 million monthly payroll. Dollars spent. The bank approved three of his applications for a total of $ 3,984,557.
The reality: Hines’ businesses, including Unified Relocation Solutions in Miami, averaged $ 200,000 in monthly income and expenses – “far less than the millions of dollars Hines asked for in PPP applications,” one said criminal affidavit.
“These alleged employees either didn’t exist or earned a fraction of what Hines claimed in his PPP applications,” said the affidavit of US Postal Inspector Bryan Masmela. In summary, Hines falsely claimed that his companies paid millions of dollars in payroll in the first quarter of 2020. However, government and bank records show little to no pay slips during this period. “
U.S. Assistant Attorney Michael Berger said certain SBA loan fraudsters were able to take advantage of the payroll protection program because while federal agency guarantees the COVID-19 aid loans issued by banks to eligible small businesses, it doesn’t bother to review claims in theirs Applications.
“As part of granting the loan guarantee, neither the SBA nor any other government agency reviewed the IRS records to confirm that the applicant paid the wage taxes listed on the PPP applications,” the criminal affidavit said.
After its SBA loans were approved, Bank of America began depositing hundreds of thousands of dollars into Hines’ business accounts. He transferred some of those funds to the Unified Relocation Solutions savings account and then, on May 18, transferred $ 318,497 to Lamborghini Miami, a luxury car dealership on Biscayne Boulevard in North Miami Beach. The Huracan Evo was jointly registered on Hines and his company. Show records.
According to the criminal affidavit, Hines did not destroy all of the SBA funds. Bank of America closed its moving company accounts on June 24, and they showed a balance of $ 3,463,162 but no repayments on the loans.
The federal trial against Hines is not his first encounter with the law.
In 2018, Hines reported a Miami Beach police officer to report that his girlfriend had stolen his Lamborghini. The police later found the sports car. But Hines became uncooperative and both he and the girlfriend fled before they were finally found and arrested.
Hines received a suspended sentence for resisting an officer nonviolently, an offense.