The US Attorney in the Southern District of Texas has arrested an individual for allegedly receiving over $1.1 million in Paycheck Protection Program (PPP) loans which were used to purchase cryptocurrency according to a statement by the Department of Justice.
Joshua Thomas Argires, 29, of Houston, is charged in a criminal complaint with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions.
According to the US Attorney Ryan K. Patrick and Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, Argires submitted to fraudulent loan applications to an FDIC insured bank. One was submitted on behalf of an entity called Texas Barbecue and the other was filed on behalf of a company called Houston Landscaping. Argires is said to have claimed these two companies had numerous employees and hundreds of thousands of dollars in payroll expenses.
Apparently, neither Texas Barbecue nor Houston Landscaping has employees nor pays wages consistent with the amounts claimed in the PPP loan applications. Allegedly the loans were funded but none of the funds were used for payroll or other expenses authorized under the PPP. The funds received on behalf of Texas Barbecue were said to have been invested in a cryptocurrency account, while the funds obtained for Houston Landscaping were held in a bank account and slowly depleted via ATM withdrawals.
The PPP is designed to backstop businesses impacted by the COVID-19 health crisis. Approved borrowers may receive 2 months of payroll plus affiliated expenses. If the borrower proves that the same level of payroll was maintained, the loan will be forgiven.
While there have been other reports of fraud utilizing PPP loans, this may be the first that involves crypto.
The Federal Housing Finance Agency – Office of the Inspector General (OIG), SBA – OIG and U.S. Postal Inspection Service’s Houston Division conducted the investigation. Trial Attorney Timothy A. Duree of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James McAlister for the Southern District of Texas are prosecuting the case.