When Lee Price III received nearly $1 million in federal coronavirus relief in June 2020, he blew much of it in a matter of days.
The money never made it into the pockets of the employees Price was supposed to pay; those employees, after all, were fictional. Instead, Price spent the money on luxury goods, including a roughly $14,000 Rolex watch, a $2,000 trip to a Houston-area strip club and a roughly $233,000 2019 Lamborghini Urus, according to prosecutors.
All told, Price received more than $1.6 million after filing fraudulent Paycheck Protection Program loan applications with multiple banks around the country, using much of the money to buy high-priced items and to pay off outstanding debt, federal prosecutors said.
Now, Price, 30, of Houston, has been sentenced to more than nine years in prison after he pleaded guilty to fraud and money laundering.
“Mr. Price hopes that others will learn from his reckoning that there is no easy money,” Tom Berg, Price’s lawyer, told The Washington Post in an email. “He has the balance of the 110-month sentence to reflect, repent and rebuild his misspent life.”
As businesses were forced to shut down and dramatically limit services at the start of the global pandemic, millions of them sought help from a $2 trillion coronavirus relief package signed in March 2020. The emergency spending bill included billions of dollars in forgivable loans for small businesses to cover expenses such as payroll and rent.
But the program was beset with attempts to defraud it. The Justice Department has charged more than 150 defendants with PPP fraud and seized back more than $75 million that was illegally obtained, officials said. In March, a Texas man pleaded guilty to obtaining $17 million via fraudulent PPP applications and using the money to buy eight homes and a fleet of cars that included a Bentley convertible. About a month later, prosecutors charged a Vermont man with obtaining about $660,000 through fraudulent PPP applications and using some of the money to purchase an alpaca farm. The case is ongoing.
Some of the efforts to defraud the program have included owners inflating their payroll expenses to receive outsize loans or applying for loans using nonfunctioning businesses and fake employees, according to Justice Department officials.
Beginning in May 2020, Price used limited liability companies to submit PPP applications to various banks and lenders around the country, which were then in charge of approving and administering the loans. One of Price’s applications was submitted to a bank in Boston. In it, he claimed that a company called Price Enterprises had 50 employees and an average monthly payroll of $375,000, according to a criminal complaint.
The bank granted the loan, and Price received $937,500 on June 26, 2020, according to the complaint. That day, Price bought a Rolex watch. The next day, he bought a Lamborghini. And in the following days, he spent thousands of dollars in trips to the liquor store, a strip club and a couple of Houston nightclubs. He also used $100,000 as a down payment on a Houston property and spent a similar amount to lease office space in the area, according to the complaint.
Investigators later discovered that Price Enterprises had no employees and reported no revenue to the state.
While Price’s applications to other banks were denied, a California lender approved a $752,452 loan after Price submitted an application under a different company name while listing a dead man as the chief executive, according to the complaint. Price used a portion of that loan to buy a Ford F-350.
Law enforcement officials seized more than $700,000 that Price had obtained. Berg said that Price recognizes the severity of the “stiff sentence” the judge imposed on Monday.