COVID Feature: Follow the Money

237
Hacking and criminal concept.A hacker in a secret hiding place is neon light.

Fraudsters tend to take advantage of vulnerable situations for their own selfish gain. A Houston man is accused of doing just that by fraudulently applying for aid meant to assist those financially impacted by the coronavirus pandemic. (Sadly, he’s one of many unscrupulous individuals jumping on the COVID-19 fraud bandwagon these days.)

Lee Price III was arrested and charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions. These charges accuse Price of falsely applying for coronavirus relief aid through the Small Business Administration (SBA) and using the obtained funds to maintain a luxurious lifestyle.

Congress has approved over $600 billion in Paycheck Protection Program (PPP) loans through the Coronavirus Aid, Relief and Economic Security (CARES) Act since March. These forgivable loans are disbursed through the SBA and intended to be used by small businesses to maintain their staff’s payroll, pay rent, and ensure the financial survival of their company. (Note that funding a luxurious lifestyle is not mentioned at all.)

There have been numerous cases of bad actors fraudulently obtaining and misusing PPP loans intended to help small businesses and struggling families. Price was allegedly involved in a scheme to submit fraudulent PPP loan applications.

Price purportedly applied for PPP loans with federally insured banks and other lenders using two companies under his name – ‘Price Enterprise Holdings’ and ‘713 Construction.’ (If you’re going to commit a crime, perhaps don’t slap your name on it, unless you want to be caught.) Price Enterprise Holdings was approved for a $900,000 loan and 713 Construction was allocated $700,000 in funding. 

Here’s a morbid, but interesting fact: the person listed as the CEO of 713 Construction had been deceased for more than a month before the loan application was submitted. (There are many things wrong with this scheme but tarnishing the name of the dead is a crime within itself.)  

The applications for each company stated that they each were responsible for a multitude of employees and their payroll expenses.  The criminal charges allude that neither company had the number of employees or amount of payroll expenses that Price claimed on the applications. (I have my suspicions that the only person Price kept on the payroll was himself.)  

The allocated funds were never used for payroll expenses, rather Price is accused of using them to purchase a Lamborghini Urus, a Rolex watch, and a 2020 Ford F-350 pickup truck. He also supposedly partook in real estate transactions and spent thousands at night clubs within the Houston area using the PPP loans. (People are out of jobs and families are starving but his priorities were to go on a spending spree. And I’m guessing he didn’t wear a mask or socially distance either.)

Price faces a maximum of 30 years in federal prison and a $1 million fine for the bank fraud charge. For the unlawful transaction charge, he faces up to 10 years in prison and a fine of $250,000.

All suspected coronavirus-related fraud should be reported to the Department of Justice’s National Center for Disaster Fraud Hotline at 1-866-720-5721 or through their Web Complaint Form.

Today’s Fraud of the Day comes from an article, “Houston entrepreneur spent $1.6M in COVID-19 relief funds on Lamborghini, strip clubs: prosecutors,” published by Click2Houston.com on August 4, 2020.

A 29-year-old Houston man is accused of making fraudulent applications for coronavirus relief aid and then spending the money on luxury items, according to a release from the U.S. Attorney’s Office.

Lee Price III was arrested and is charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions. He appeared in federal court at 2 p.m. Tuesday and was appointed a federal public defender during the hearing and a detention hearing was scheduled for Thursday at 10 a.m.

 

 

SHARE
Previous articleThe Wheels Never Stopped Turning
Next article“F” Is for Fraud
Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.