During the coronavirus (COVID-19) pandemic, the government implemented specific programs quickly to keep businesses and families afloat. Some people took advantage of the Paycheck Protection Program (PPP) to fund extravagant personal supercar purchases like Lamborghinis, Ferraris, and even a Rolex or two. What is PPP fraud, and how does one buy a Lamborghini with it?
Paycheck Protection Program (PPP) fraud: Lamborghini edition
According to the Department of Justice Office of Public Affairs, Lee Price III, 30, of Houston, pleaded guilty to fraud charges this week. The Texas man fraudulently obtained more than $1.6 million in PPP loans. The Small Business Administration (SBA) under the Coronavirus Aid, Relief and Economic Security (CARES) Act guaranteed these loans. Upon receiving the money, Price almost immediately bought a Lamborghini Urus.
Price applied for loans using two different applications and two different lenders on behalf of 713 Construction LLC and Price Enterprises Holdings LLC. After that, he filed the loan for 713 Construction under the name of someone who had recently died.
Price faked the number of employees and the payroll expenses on the applications to qualify for a bigger loan. He also falsified tax records and other documents to supplement the fraudulent applications. According to the court documents, the government approved the $752,452 loan for 713 Construction. Then, a $937,500 loan for Price Enterprises Holdings was approved. After that, the Lamborghini was almost his.
Why not buy a Lamborghini and a Rolex with $1.6 million in loans?
According to the court documents, Price went all-out upon receiving the money. He bought a Rolex watch for $14,343.13. He also bought a 2019 Lamborghini Urus for $233,337 and a $85,000 2020 Ford F-350 truck. After that, Price paid off the loan on a house and made some other smaller purchases. According to an earlier announcement from the Department of Justice, Price spent thousands of dollars at local Houston strip clubs and nightclubs in addition to the Lamborghini.
However, the businesses on the applications were not legitimate and did not require the amount requested for payroll or other costs.
“On Application 1, PRICE claimed that 713 Construction had 30 employees and an average monthly payroll of $300,981. However, 713 Construction actually had no employees and no payroll.”United States Courts Southern District of Texas | Case 4:20-cr-00522
In court, Price pleaded guilty to two counts of wire fraud and three counts of money laundering. Each count of wire fraud carries the potential for 20 years in prison. Similarly, each count of money laundering has the potential for 10 years in prison.
File this under “what not to do”
Price is far from the only one who tried to scam the government. Since the government announced PPP loans, there have been numerous cases of people obtaining money and immediately buying a Lamborghini or Ferrari. It seems that the allure of buying a supercar will ill-gotten gains is too strong to ignore. In many of the cases, these individuals have already been caught and taken to court.
The government denied loans for smaller businesses that applied and gave people like Lee Price III loans. The fraud above won’t be the last time the government busts someone for fraudulently using PPP funds to buy a Lamborghini, that’s for sure. The courts will sentence Price on Nov 29. Cue the Cops theme song.