Thinking of buying a hot Italian sports car with PPP loan proceeds? Maybe reconsider …

Purchasing a $318,000 Italian sports car with money obtained through a federal program meant to help businesses through the coronavirus crisis is strongly frowned upon, a Florida man learned Monday when he was charged with bank fraud and other offenses.

In a release, the U.S. Justice Department said David T. Hines, 29 of Miami, Fla., was charged with one count of bank fraud, one count of making false statements to a financial institution, and one count of engaging in transactions in unlawful proceeds. Hines appeared in federal court Monday, the prosecutors said.

Hines appeared before a federal magistrate of the southern district of Florida in Miami.

Among other things, prosecutors alleged, Hines fraudulently obtained $3.9 million in Paycheck Protection Program (PPP) loans and used those funds, in part, to purchase a sports car (a 2020 Lamborghini Huracan) for himself, valued at $318,000. The Justice Department said $3.4 million from Hines’ bank accounts were also seized at the time of arrest.

The PPP is administered by the Small Business Administration (SBA) to provide funds to businesses to assist them in paying their employees to offset the financial impact of the coronavirus crisis. Banks, credit unions, and other financial institutions take the applications for the loans and distribute the loan proceeds. Loan proceeds must be used for payroll costs, interest on mortgages, rent, and utilities. The program 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.

The complaint unsealed in federal court Monday alleges that Hines sought approximately $13.5 million in PPP loans through applications to an insured financial institution on behalf of different companies. The complaint alleges that Hines caused to be submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ respective payroll expenses. The financial institution approved and funded approximately $3.9 million in loans.

Federal authorities said the complaint also alleges that within days of receiving the PPP funds, Hines purchased the Lamborghini sports car for approximately $318,000. He allegedly registered the car jointly in his name and the name of one of his companies.

In the days and weeks following the disbursement of PPP funds, the complaint alleges, Hines did not make payroll payments that he claimed on his loan applications. He did, however, make purchases at luxury retailers and resorts in Miami Beach, prosecutors allege.

The Justice Department noted that the offices of inspector general of both the Federal Deposit Insurance Corp. (FDIC) and the Consumer Financial Protection Bureau (CFPB) – as well as the Federal Reserve – investigated the case.

Florida Man who Used COVID-Relief Funds to Purchase Lamborghini Sports Car Charged in Miami Federal Court

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