HOUSTON, Texas (KETK) – Federal prosecutors say a Houston man bilked the government out of $1.6 million in COVID-19 business relief funding and spent some of the money on a Lamborghini, jewelry and trips to strip clubs, among other things.
Lee Price III, 29, was arrested on charges of making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions, according to the U.S. Attorney for the Southern District of Texas.
Price’s arrest comes as millions of Americans face sharply reduced income or unemployment due to the pandemic or face losing their homes as emergency eviction and foreclosure protections expire.
Prosecutors allege that Price 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 allegedly used the loan proceeds not for payroll expenses, but for lavish personal purchases, such as loan money on a Lamborghini Urus, a Rolex watch, and real estate transactions.
He also allegedly 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 Paycheck Protection Program was enacted by Congress to give low-interest loans to small businesses struggling during the pandemic.