A Houston man is in custody after federal prosecutors say he fraudulently obtained $1.6 million in COVID-19 business relief money, some of which he spent on personal purchases such as a Lamborghini Urus and visits to strip clubs.

Lee Price III, 29, is at least the second person in Houston’s federal court accused of stealing money from the Paycheck Protection Program, which gives loans at low interest rates to business financially struggling as a result of the novel coronavirus pandemic and ensuing economic downturn.

Authorities say Price partook in a scheme to submit fraudulent Paycheck Protection Program applications to federally insured banks and other lenders, netting $900,000 from one application and $700,000 from another.

A company called Price Enterprises Holdings received the first loan, according to an unsealed complaint, and 713 Construction received the second. The applications stated that both businesses had numerous employees and large amounts of payroll expenses, neither of which was true, according to prosecutors.

Other information on the forms was false as well, the complaint alleges. The person listed as a CEO on the 713 Construction loan application had died a month before the application was submitted in May.

Federal prosecutors say that Price used the loans for his own personal extravagance, including loan money on a Lamborghini Urus and a 2020 Ford F-350 pickup , a Rolex watch and real estate. He spent thousands of dollars at strip clubs and Houston night clubs, according to U.S. Attorney Ryan K. Patrick and Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.

Paycheck Protection Program (PPP) loans are distributed under the Coronavirus Aid, Relief and Economic Security (CARES) Act, a federal law for coronavirus relief.

Qualifying small business can receive loans under the PPP with a maturity of two years and an interest rate of 1 percent. The loan proceeds must be used on payroll costs, interest on mortgages, rent and utilities. The interest and principal amounts can be forgiven on these loans if businesses spend them within a set time period and use a certain percentage toward payroll expenses.

Price is charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions.

He was scheduled for an initial appearance at 2 p.m. Tuesday before U.S. Magistrate Judge Sam S. Sheldon.

samantha.ketterer@chron.com

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