U.S. authorities have charged a man for diverting funds from a Covid-19 relief program to trade in cryptocurrencies. The man was taken to custody for fraudulently obtaining two loans.
The United States’ Department of Justice announced it on Tuesday, July 14, 2020. It charged Joshua Thomas Argires of Houston, Texas, with covid-19 relief loan fraud. The 29-year old Texan obtained two loans from the Paycheck Protection Program (PPP) intended for the covid-19 relief aid program. He allegedly spent some of it to invest in cryptocurrency.
Fake PPP Loan Applications
The DOJ said the Argires allegedly schemed to file two duplicitous applications for over $1.1 million in forgivable loans. The Small Business Administration (SBA) guarantees the loans for COVID-19 relief through the PPP under the Coronavirus Aid, Relief and Economic Security (CARES) Act. Argires submitted the fake PPP loan applications on behalf of two entities called Texas Barbecue and Houston Landscaping. The man claimed that the two companies had numerous employees and hundreds of thousands of dollars in payroll expenses.
Argires received the loan meant for Texas Barbecue and invested the amount in an account on the Coinbase cryptocurrency exchange. The federal criminal complaint says Argires made several transactions beginning May 19, 2020, amounting to $956,250 into the Coinbase account through five wire transfers.
Slowly Depleted Via ATM Withdrawals
The law agency said as of June 30, the invested money was in Argires account and had already generated a profit. He held the funds obtained for Houston Landscaping a bank account and slowly depleted via ATM withdrawals. The court documents state:
“ARGIRES has exclusive control of the Coinbase account. Indeed, ARGIRES is the sole user associated with the account. There is no indication that anyone else manages this account for him. The internet protocol address associated with several of the Coinbase account transactions appears to be associated with a physical location. Or very near to a residence in Southwest Houston that investigators believe is associated with ARGIRES.”
Repay With A 1% Interest
United States President Donald Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law on March 29. The fund is inteded to offer emergency assistance to Americans negatively impacted by the ongoing Covid-19 pandemic. Small businesses receiving the PPP loans repay with a 1% interest under a 2-year maturity period. The DOJ stated:
“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 period and use at least a certain percentage of the loan towards payroll expenses.”
