Daily Tax Report ®

Strip Club Visit, Lamborghini Purchase at Center of PPP Fraud Case

Aug. 5, 2020, 1:49 PM

A Houston man accused of spending relief loan funds on a Lamborghini, Rolex, and strip club visits has been detained pending trial.

Lee Price was arrested for making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions, according to the complaint, which was unsealed Tuesday upon his arrest, the Department of Justice announced.

Price received more than $1.6 million after submitting two false loan applications, according to the complaint.

Price appeared in court Tuesday and a preliminary hearing is set for Thursday before Magistrate Judge Sam S. Sheldon at the U.S. District Court for the Southern District of Texas.

The Paycheck Protection Program was created in the CARES Act (Public Law 116-136), a sweeping virus relief law. The PPP was meant to give small businesses loans that could be forgiven if the government’s requirements were met.

Price allegedly requested a $937,500 loan under the umbrella of Price Enterprises, and claimed the company had 50 employees and an average monthly payroll of $375,000. An investigation found Price Enterprises had no employees or payroll, according to the complaint.

Another entity, 713 Construction, requested $752,452, but an investigation found it also had no employees or payroll, according to the complaint. The CEO listed on that application died before the application was submitted, the complaint said.

Causes of Action: False statements to financial institution, wire fraud, bank fraud, engaging in prohibited monetary transactions.

Response: Price is represented by a Houston public defender. The office didn’t immediately return a request for comment.

Attorneys: More specific counsel information wasn’t immediately available.

The case is United States v. Price, S.D. Tex., No. 4:20-mj-01366, complaint unsealed 8/4/20.

To contact the reporter on this story: Colleen Murphy in Washington at cmurphy@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Rob Tricchinelli at rtricchinelli@bloomberglaw.com

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