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The White Collar Defense Report® | August 2020 News Roundup

On Behalf of | Aug 19, 2020 | White Collar Defense Report

The White Collar Defense Report® provides updates on cases, policy developments and trends in the white collar area, including federal criminal matters as well as civil cases such as qui tam cases and SEC enforcement actions.

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PPP Loan Fraud Prosecutions Pick Up Speed

Paycheck Protection Program (PPP) loan fraud continues to be a prosecution priority for the Department of Justice. Florida and Texas seem to have the most high-profile prosecutions related to the loan program. As noted in previous issues, DOJ is prosecuting PPP fraud cases only months after the alleged offense, much faster than any other white collar cases have ever been prosecuted.

The owner of a Florida talent management company and four others were charged for their alleged participation in a scheme to file at least 90 fraudulent loan applications seeking more than $24 million in forgivable PPP loans.

A Houston man has been taken into custody on allegations he fraudulently obtained more than $1.6 million in PPP loansLee Price III, 29, allegedly claimed fictitious employees on  loan applications and spent PPP money on a Lamborghini, a 2020 Ford F-350, a Rolex watch, real estate and at night clubs, according to the complaint.

A Florida man was arrested on allegations that he fraudulently sought several PPP loans submitting false tax documents and phony P&L statements. It is also alleged that he participated in a scheme to defraud Medicare of at least $5.6 million by supplying false claims for orthotic braces.

The owner of a residential construction contracting firm based in Washington, D.C., was charged with allegedly submitting fraudulent documents to a bank in connection with applications seeking more than $400,000 in PPP loans.

Another Houston man was taken into custody on allegations he fraudulently obtained more than $1.1 million in PPP loansJoshua Thomas Argires, 29, is charged in a criminal complaint with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions. Argires allegedly falsely claimed that Texas Barbeque and Houston Landscaping had numerous employees and hundreds of thousands of dollars in payroll expenses.

A California man was arrested and charged with fraudulently seeking over $8.5 million in PPPAndrew Marnell, 40, of Los Angeles was charged in the Central District of California with one count of bank fraud for allegedly making false statements about the companies’ operations and submitting false tax documents. It is alleged that hundreds of thousands of dollars were spent in risky stock investments and at a Las Vegas casino.

A Washington tech executive was taken into custody and charged with fraudulently seeking over $5.5 million in PPP loans and laundering the proceeds. Mukund Mohan, 48, of Clyde Hill was charged in the Western District of Washington with one count of wire fraud and one count of money laundering. The complaint alleges that Mohan submitted at least eight fraudulent PPP loan applications on behalf of six different companies. It is alleged that fake tax documents and numerous false statements about the companies’ payroll expenses were made by Mohan.

David T. Hines, 29, of Miami, Florida, was arrested and charged with fraudulently obtaining $3.9 million in PPP loans and using those funds, in part, to purchase a $318,000 sports car for himself. Authorities seized the Lamborghini, and $3.4 million from bank accounts at the time of his arrest.

Could your business already be in DOJ’s crosshairs?

There is an unprecedented coordination between government agencies regarding the investigation of PPP fraud crimes. In many cases, businesses with no intent to defraud U.S. taxpayers get caught in a net of overzealous prosecutions. Business owners and executives must seek experienced counsel if they receive any indication they are being investigated.

Healthcare Fraud Prosecutions

From genetic testing to compounding pharmacies and telemedicine, healthcare fraud prosecutions remain a DOJ priority.

Tax Fraud and False Claims Act Violations

We’re seeing continued tax fraud prosecutions, as well as multimillion-dollar false claims settlements.