Some $800 billion was issued to help keep American workforces employed during quarantine, but not everyone who applied for relief was trying to keep a legitimate business afloat. As of April, 178 Americans have been sentenced by the Department of Justice for fraudulently accepting Paycheck Protection Program (PPP) loans. And per NBC, that’s just a tiny percentage of those who scammed the government out of $80 billion in taxpayer money, or about 10 percent of the total program.
Acting Assistant Attorney General Brian Rabbitt divides the criminals and the wrongdoers into two distinct categories: On the one hand, there “are the coordinated criminal rings that have engaged in systematic, organized conduct to loot the PPP”; on the other, there are the “individuals — or small groups — who lied about having legitimate businesses, or who claimed they needed PPP money for things like paying their workers, but instead used it to buy splashy luxury items for themselves.”
On the latter count, the DOJ is continuing to go after the folks who they say scammed the government into bankrolling their shopping sprees and gambling adventures. Below are a few of those cases, including some defendants who have been charged and are awaiting trial, and others who have faced sentencing and have already handed over the keys to their new Lamborghini.
Looks like Baby Blue of the group Pretty Ricky, who once glanced at fame on Love & Hip-Hop: Miami, saw the federal PPP payouts as a way to snatch up some quick money. In fact, the DOJ claims that when his first application worked so well — and all that free money showed up in his bank account — he immediately went back for seconds. According to the DOJ, Baby Blue is “alleged to have obtained a PPP loan of $426,717 for his company, Throwbackjersey.com LLC, using falsified documents.” After that, he “sought and obtained another PPP loan of $708,065 for his other company, Blue Star Records LLC, using falsified documents.”
He definitely went big time with that new cash. The DOJ says Baby Blue purchased a Ferrari for $96,000 and spent 27 grand at the Seminole Hard Rock Hotel and Casino. At some point, he also made the time to drop “$2,290 in goods at Versace” to upgrade his drip.
Ultimately, Baby Blue pleaded guilty and was sentenced to 20 months in prison.
Keyaira Bostic, 31, of Pembroke Pines, Florida not only secured a big-ass PPP loan for herself, she also hooked up her friends and family. The DOJ claims Bostic was part of a ring of nine people who all “participated in an extensive nationwide scheme to file at least 90 fraudulent applications for millions of dollars in PPP loans in exchange for illegal kickbacks of portions of the loan proceeds.”
She was certain that she’d never get caught. She even told friends she roped into the scheme that, unlike those other scammers getting busted, she knew how to fly under the government’s radar. In the criminal complaint against her, the feds noted that Bolstic texted a friend a link to an article about PPP fraud charges against a reality star: “[Wh]hat he did and the amount was a huge red flag.”
In February, though, Bostic was sentenced to 44 months in federal prison for defrauding the PPP of more than $3.3 million. Clearly, she missed a few red flags of her own.
Former NFL player Josh Bellamy just so happened to be part of the same fraud ring as Bostic. The 31-year old received a PPP loan of $1,246,565 for his own company, Drip Entertainment LLC. Bellamy soon went on a shopping spree, during which he “purchased over $104,000 in luxury goods … including purchases at Dior, Gucci and jewelers.” And he, too, blew at least another $62,000 at the Seminole Hard Rock Hotel and Casino. In December, Bellamy was sentenced to more than three years for COVID relief fraud.
Andrew Marnell of West Los Angeles pled guilty last year for frauding the feds out of nearly $9 million. According to federal officials, he filed fraudulent paperwork for multiple companies in multiple states and even had multiple identities to match. In his criminal indictment, the DOJ details a Montana-based company called Shale Creek run by a man named “Tyler Lerman,” as well as a Wyoming-based company called Slatestone, run by “Andrew Merrill,” and finally, another Montana-based company called Quicksilver, run by “Andrew Maxwell.” All three men, of course, were actually Marnell.
With the cash, Marnell bought himself some grown-up toys, took himself on gambling sprees to Vegas and lost a bunch of money on the stock market. Per the Sacramento Bee, in his plea deal, Marnell agreed to give up a Rolex Oyster watch, a Range Rover and a Ducati motorcycle. “He also agreed to surrender $1.5 million seized from brokerage accounts and more than $319,000 in cash found in his home.”
Defense contractor Martin Kao, 47, of Hawaii has pleaded not guilty on charges of bank fraud and money laundering for allegedly lying on a PPP application for more than $12.8 million in federal aid. In a separate case, Kao has also been accused of making unlawful campaign contributions to Senator Susan Collins of Maine. “A Honolulu-based company that received an $8 million contract for defense work in Maine appears to be linked to a mysterious campaign donation made to a super PAC backing U.S. Sen. Susan Collins in her bid for re-election,” the Hawaiian news outlet Civil Beat reported.
In what sounds like the most Hallmark version of PPP loans yet, the DOJ claims Brandon Casutt, 49, of Nevada lied on his loan paperwork and used the cash to buy a home for his family. To make it work, he allegedly got his whole community involved. With his 500k in PPP loans, the DOJ says Casutt wrote checks to 23 different people, and after they were cashed, he had the money “diverted to a bank account” and then used the funds “to purchase a $400,000 house in Henderson, into which he and his family moved at the end of June 2020.”
All that’s stopping this case from becoming a Hollywood blockbuster is someone learning the meaning of Christmas along the way.
When the PPP loans dropped, Lee Price III, a career criminal with a long rap sheet, rushed for the flashiest thing he could buy — a brand new Lamborghini Urus. The $200,000 SUV looks like an expensive toy, which is exactly what it is. But the Texan also had to buy himself a truck made for the Lone Star state — a Ford F-350. Then he looked down and saw that he needed some eye candy for his wrist. So he bought a Rolex. Next, he hit up the strip clubs of Houston.
In November, Price was sentenced to over nine years in prison. The lesson here: Just because you’re a career criminal doesn’t mean you’re any good at it.
Gregory J. Blotnick, 34, of Florida, pleaded guilty to stealing $4.6 million from the PPP program. According to the U.S. Attorney in Newark, Blotnick had applied for “21 loans among 13 different lenders between April 2020 and May 2021, receiving $4,681,796 of the $6,889,089 he attempted to obtain.”
Blotnick took his scammed $4.6 million and pumped it into his brokerage accounts. The next phase of his criminal plan was to bet big on the pandemic-addled stock market and “buy on the dip.” But rather than making a killing on the upswing, Blotnick proceeded to lose $3 million on his amateur stock picks. He now “faces a maximum total penalty of 30 years in prison.” Needless to say, there are easier ways to lose all your money in the stock market.
Dinesh Sah, 55, of Texas, is among the oldest people to face PPP fraud charges. He also decided to go far bigger than just about anyone else: In March, he pleaded guilty to attempting to defraud the government to the tune of nearly $25 million.
Sah filed fraudulent loan paperwork on 15 different applications and managed to convince eight different lenders to approve his PPP loans. And once he got his cool $25 million, Sah went on a mad shopping spree. He decided to “purchase multiple homes in Texas, pay off the mortgages on other homes he had in California and buy a fleet of luxury cars, including a Bentley convertible, Corvette Stingray and Porsche Macan.”
In his arrangements with the DOJ, “Sah agreed to forfeit, among other property, eight homes, six luxury vehicles and more than $9 million in fraudulent proceeds that the government has seized to date.” He was also sentenced to more than 11 years in federal prison.
You have to figure that when the government is giving out $800 billion in relief aid, someone is going to eventually double-check all that paperwork.