The U.S. Department of Justice announced fraud charges against a Texas man accused of fraudulently obtaining $1.1 million in federal loans earmarked for small businesses affected by the coronavirus (COVID-19) pandemic.
Joshua Thomas Argires, 29, of Houston was charged with making false statements to a financial institution, engaging in unlawful monetary transactions, wire fraud, and bank fraud. It is unclear if he has acquired the services of an attorney.
According to the criminal complaint, the defendant is accused of filing two fraudulent loan applications requesting more than $1.1 million in loans from the Small Business Administration (SBA) through its Paycheck Protection Program (PPP). The PPP is a federal program designed to provide small American businesses affected by the coronavirus pandemic with funding for job retention and other business-related expenses. Qualifying businesses can receive two-year loans with a one percent interest rate. Congress authorized over $650 billion in forgivable loans as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The defendant allegedly submitted two PPP loan applications to federally insured banks for Texas Barbecue and Houston Landscaping. He claimed the two companies hired several workers and paid hundreds of thousands of dollars in payroll, the complaint states.
Records show that neither company has workers or payroll consistent with the amounts the defendant allegedly claimed in the loan applications. Both loan requests were approved and funded, but the money was reportedly not used for payroll or other expenses authorized under the PPP.
The transactions involving the loan proceeds were flagged and that initiated a multi-agency investigation into the two companies. The investigation revealed that the funds for Texas Barbecue were sent to a private cryptocurrency account on Coinbase.com, while the funds for Houston Landscaping were slowly withdrawn via ATMs. Additionally, investigators from the U.S. Postal Service (USPS) discovered that Texas Barbecue did not exist until four days before he allegedly filed the PPP application.
When questioned by investigations about the transactions, the defendant allegedly told them that the employees were paid through a Coinbase account but he “didn’t manage that aspect” of the business. Investigators learned that the Coinbase account was directly controlled by Argires and no workers were being paid through the service.
The investigation into the defendant’s’ alleged fraud scheme was conducted by the SBA Office of the Inspector General (OIG), the Federal Housing Finance Agency OIG, and the USPS’s Houston Division. The press release announcing the charges against him noted that a federal criminal complaint is merely an accusation. The defendant is presumed innocent until proven guilty in court.
Several states are cracking down on fraud related to the COVID-19 pandemic. In Florida, for example, the U.S. Attorney’s Office for South Florida announced the formation of a task force whose goal is to identify and prosecute fraud cases related to the coronavirus.
Anyone accused of committing COVID-19 fraud should immediately consult an experienced attorney who can review the evidence and decide the best course of action.
South Florida Fraud Defense Attorney