COVID-19 loan fraud, gaming the system and more

This Lambo loan is a no-no

According to authorities, David T. Hines, 29, first bought a super-luxury Lamborghini Huraca Evo after he received $4 million in COVID-19 relief loans for his supposedly ailing South Florida moving business.

The Italian sports car — which he purchased for $318,497 in May — isn’t, of course, on the list of permissible expenses under a Small Business Administration loan program that’s meant to protect employees and cover other legitimate costs, like rent, during the coronavirus pandemic.

Hines, who was arrested on July 24, also spent thousands of dollars on dating websites, jewelry and clothes, plus stays at high-end hotels such as the Fontainebleau and Setai on Miami Beach. According to the article, he was granted a $100,000 bond and will be allowed to stay at his mother’s home with a GPS monitor. Hines’ arraignment is scheduled for Oct. 14.

See He bought a Lamborghini after getting a $4 million PPP loan. Now he faces a fraud charge. by Jay Weaver, Miami Herald, July 28.

6 former NFL players allegedly try to game the system

Six former NFL players have been charged with defrauding a health care benefit program for retired NFL players, according to an NBC Sports article.

According to the article, two-time Pro Bowl running back Clinton Portis is the most notable name in the group. The others are Darrell Reid, Antwan Odom, Anthony Montgomery, Tamarick Vanover and Robert McCune.

Prosecutors say the players falsely claimed they’d purchased expensive medical equipment like hyperbaric oxygen chambers, cryotherapy machines and ultrasound machines and then requested reimbursement from the program — typically in amounts from $40,000 to $50,000. The players allegedly fabricated documents including invoices and letters of medical necessity.

All six defendants face charges of conspiracy to commit health care fraud and wire fraud. (See Clinton Portis among six NFL players charged in health care fraud conspiracy, by Michael David Smith, NBC Sports, July 25.)

Czech your investors before you give them cash

After a long-term investigation, Lethbridge (Alberta, Canada) police have charged two southern Alberta men in connection with a multimillion-dollar investment fraud scam, according to a Global News article.

Police said the investigation found RAUE Global, a Calgary-based investment company, had defrauded a Lethbridge man of more than $3.1 million, according to the article. The victim had been seeking more than $25 million to build a major project in Ontario. RAEU and an Okotoks, Alberta, brokering firm agreed to provide the money, but the deal stipulated that the victim needed to provide a $3.1 million “down payment.”

The victim raised the money through several of his own investors and made the down payment, but he never received the loan. According to the article, RAEU transferred the money paid by the victim to its associates’ bank accounts, including accounts in the Czech Republic.

Dustin Ritter, 36, of Okotoks, has been charged with fraud over $5,000 and possession of property obtained by crime over $5,000. Josef Korec, 46, is also facing several charges, but police say he fled the country for the Czech Republic. A warrant has been issued for his arrest.

See 2 men charged in multi-million dollar investment fraud: Lethbridge police, by Demi Knight, Global News, July 30.