LOS ANGELES - A Texas man was taken into custody on charges that he obtained more than $1.6 million in Paycheck Protection Program loans, which he spent on “luxury items, real estate and personal entertainment,” according to the U.S. Department of Justice.
An Aug. 4 press release from the DOJ said that Lee Price III was allegedly involved in part of a scheme to submit fraudulent PPP loan applications to federally insured banks and other lenders.
The PPP program, part of the larger Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law in March, was designed with the aim of helping keep small businesses afloat during the economic uncertainty triggered by the coronavirus pandemic.
The program resumed accepting new applications on July 6, with Aug. 8 set as the current deadline to apply for a PPP loan, according to the U.S. Small Business Administration.
The DOJ said two of the fraudulent applications approved for loans described entities that supposedly had “numerous employees and significant payroll expenses.”
“However, neither entity has employees nor pays wages consistent with the amounts claimed in the loan applications,” the DOJ said.
The 29-year-old allegedly used the money received from the loans on personal purchases such as a Lamborghini Urus, a Ford F-350, a Rolex watch and real estate transactions. Price also allegedly spent thousands of dollars of PPP money at strip clubs and night clubs in Houston.
“Price is charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions,” according to the DOJ, which noted that Price was expected to make his initial appearance before the U.S. Magistrate Judge Sam S. Sheldon in Houston on Tuesday.
This is not the first instance of a person being charged for alleged improper and fraudulent use of PPP funds.
In a similar case in July, Miami resident David T. Hines was charged after federal authorities claimed he used PPP funds to purchase a Lamborghini.
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In May, the head of a Hollywood production and distribution company was charged after he allegedly attempted to fraudulently obtain $1.7 million in PPP funds.