A rapper allegedly pocketed $1million in COVID-19 relief funds to buy a Ferrari.
Diamond Blue Smith from South Florida has been arrested after he allegedly faked documents and pocketed over $1 million in the coronavirus relief funds as part of the $24 million fraud scheme.
Smith, a member of the R&B group Pretty Ricky, was arrested two days after his accomplice, Tonye Johnson, was taken into custody.
A press release from the Department of Justice said: “The complaints, which were unsealed today, allege that Smith and Johnson conspired with others to obtain millions of dollars in fraudulent PPP loans.”
Smith is accused of obtaining fraudulent loans from the Paycheck Protection Program launched during the coronavirus pandemic, the Daily Mail reported.
The press release said: “Smith, a recording artist, is alleged to have obtained a PPP loan of $426,717 for his company, Throwbackjersey.com LLC, using falsified documents.
“Upon completion of that loan, Smith then sought and obtained another PPP loan of $708,065 for his other company, Blue Star Records LLC, using falsified documents.”
Also known as Baby Blue, Smith reportedly used the money to buy a Ferrari and Versace products.
The 36-year-old spent more than $27,000 at the Seminole Hard Rock Hotel and Casino on July 6, Daily Mail reported.
From May to August, he withdrew more than $270,000 in alleged loan proceeds and allegedly used over $2,000 on Versace goods.
Smith was arrested and the Ferrari was seized by authorities.
Court documents read: “The conspirators in the scheme planned or prepared at least 90 fraudulent applications, most of which were submitted.”
Prosecutors also said that 42 of all the total loans were approved, amounting to $17.4 million. “Certain of those loan recipients then wired a kickback of varying amounts, often approximately 25% of the fraudulent loan proceeds, to an account controlled by (a defendant),” court documents read.
Both Johnson and Smith were charged with bank fraud, wire fraud, and conspiracy to commit bank fraud and wire fraud.
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