Officials in Houston have taken into custody a US citizen who allegedly used the $1.1 million worth PPP loan money to buy crypto, announced The Department of Justice (DOJ) on Tuesday.
A US citizen named Joshua Thomas Argires, age 29, was charged by the DOJ for illicitly applying and obtaining the PPP loan and using that money for personal purposes, which included buying cryptocurrencies.
PPP loan handouts: Is that sufficient?
For those who are still in the dark about the Paycheck Protection Program (PPP) initiative, it was created following the coronavirus outbreak, which hit small businesses and startups really hard. Worldwide, companies are shutting down, and unemployment rates are soaring at all-time highs.
Thus, in an attempt to soften the blow to these flailing businesses, the Trump administration decided to set aside over $520 billion for as many as five million businesses.
Unfortunately, several surveys reveal that for as many as 84% of small enterprise owners, this PPP loan handout money is insufficient to get them through with just 16% confirming that they will be able to sustain beyond July. Argires thought it was okay to take advantage of this chaos and earn some quick bucks with crypto.
US man caught for wrongly obtained PPP loan
According to the DOJ announcement, Argires applied PPP loan relief application to financial institutions, claiming that he too is one of the victims of COVID, obtained it, and then went to use that money for wire fraud and money laundering purposes.
Falsely personating himself as the business owner of two different firms – Texas Barbecue and Houston Landscaping, Argires applied for the relief package stating that he too has hundreds of employees to take care of and is in urgent need of the stimulus money.
It was later discovered on Monday that not only was he not in charge of the stated number of employees, and that the payroll details presented were fabricated, but he did not use the PPP loan money to pay any of his employees.
Rather, the relief money received against Texas Barbecue was used to buy and transact in cryptocurrencies, and the one obtained for Houston Landscaping was used deposited in his personal account and then partially withdrawn through ATMs.
The Feds are watching
Although the accused is yet to be proven guilty of his crimes, it is a stark reminder for those who have similar dubious intentions in mind for the coronavirus bailout or PPP loan money.
The Federal police have warned that such attempts will not be overlooked, and the relief money for small businesses must strictly be used for payroll, rent, utilities, and mortgage-related payments only.