A man has been taken into custody based on allegations that he obtained more than $1.1 million in Paycheck Protection Program (PPP) loans, with some of the COVID-19 relief payments invested in cryptocurrency accounts, according to a statement from the United States Department of Justice (DoJ).
In the statement, which references Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick for the Southern District of Texas, the man in custody is Joshua Thomas Argires, 29, of Houston, Texas.
He has been charged in a criminal complaint, which was unsealed upon his arrest on Monday. In particular, he has been charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions.
According to the complaint referenced in the DOJ’s statement on Monday, Argires allegedly conducted a scheme to file two fraudulent loan applications seeking more than $1.1 million in forgivable loans.
This was done under the Small Business Administration (SBA). The SBA guarantees the loans for COVID-19 relief through the PPP under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
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DOJ: relief funds invested in cryptocurrency
However, according to the complaint, Argires submitted two fraudulent PPP loan applications. These were sent to federally insured banks. One application was submitted on behalf of Texas Barbecue; the other for a company called Houston Landscaping.
On the applications, Argires claimed that both of these companies had numerous employees as well as hundreds of thousands of dollars in payroll expenses. However, according to the DOJ’s statement, this is false, and neither of the company have employees or wages that match the figures on the application.
Furthermore, the complaint for US authorities claims that although the PPP loans were funded, the funds weren’t actually used for payroll expenses, but the funds received on behalf of Texas Barbecue were invested in a cryptocurrency account and as for Houston Landscaping, these funds were held in a bank account and taken out gradually via ATM withdrawals.
“The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent,” the DOJ explained in its statement. “Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.”
Argires made his initial appearance on Monday before U.S. Magistrate Judge Peter Bray.