Credit: cars.com / Lamborghini Urus

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A Houston man has been arrested and charged with fraudulently obtaining $1.6 million in COVID-19 business relief money, some of which he spent on personal purchases such as a Lamborghini Urus and visits to strip clubs. Lee Price III is charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions, according to a statement Tuesday from the U.S. Attorney’s office.  Prosecutors said Price, a 29-year-old entrepreneur   was involved in a scheme to submit fraudulent PPP loan applications to federally insured banks and other lenders. The Small Business Administration (SBA) guarantees the loans for COVID-19 relief through the PPP under the Coronavirus Aid, Relief and Economic Security (CARES) Act. Two fraudulent applications received funding, according to the complaint. Price Enterprises Holdings allegedly received more than $900,000, while a loan application listing 713 Construction was approved for over $700,000. The loan applications allegedly asserted both entities each had numerous employees and significant payroll expenses. According to the charges, however, neither entity has employees nor pays wages consistent with the amounts claimed in the loan applications. Further, the individual listed as CEO on the 713 Construction loan application died in April 2020, a month before the application was submitted, according to the complaint.  Price reportedly spent the money on luxury items, including Lamborghini Urus, a Rolex watch,  real estate and personal entertainment.   (A 2019 Lamborghini Urus  is priced from $200,807 — $282,435).   Prosecutors also alleged Price spent thousands at strip clubs and other Houston night clubs. The complaint further alleges Price used a portion of the loan money to buy a 2020 Ford F-350 pickup truck.

The CARES Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.

If convicted, Price could face a maximum penalty of up to 30 years in federal prison and $1 million fine on the bank fraud charge and up to 10 years in federal prison and a $250,000 fine for the unlawful transactions charge.