A Texas man has been arrested for allegedly taking US$1.1 million [AU$1.57 million] in COVID-19 relief funds and using it to buy cryptocurrency.
The man in question is Joshua Thomas Argires, age 29, and he is facing charges of wire fraud, engaging in unlawful monetary transactions, bank fraud, and making false statements to a financial institution.
Taking advantage of COVID-19 relief
Law enforcement says that Argires made two fraudulent loan applications to the Small Business Administration (SBA) in order to access the Paycheck Protection Program (PPP). The CARES Act of 2020 makes loans through the PPP to help businesses cover payroll expenses during the ongoing coronavirus pandemic.
Argires filed loans for two companies—“Texas Barbecue” and “Houston Landscaping.” He claimed both businesses had payroll expenses in the hundreds of thousands of dollars due to having a lot of employees.
However, it appears that the two businesses have no employees, or if they do have employees, they are not paid with the rates claimed on the loan applications. Argires took the money from the PPP loans and used it to buy cryptocurrency.
After receiving the loans, Argires made five wire transfers into his Coinbase account. The five wire transfers amounted to a total of US$956,250.
The total cryptocurrency investment made by Argires is still in his Coinbase account.
Authorities have tied the defendant to the account, stating, “Argires has exclusive control of the Coinbase account. Indeed, Argires is the sole user associated with the account, and there is no indication that anyone else manages this account for him.”
Authorities add, “Additionally, the internet protocol address associated with several of the Coinbase account transactions appears to be associated with a physical location in or very near to a residence in Southwest Houston that investigators believe is associated with Argires.”
If the loans had been legitimate, Argires would have time to pay them off. The loans have a maturity of two years and an annual interest rate of one percent. The Department of Justice also notes, “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.”
Using fraudulent loans for COVID-19 relief to buy traceable cryptocurrency appears not to be the wisest move.