Many small businesses were granted SBA-backed loans during the pandemic known as “PPP Loans” (Paycheck Protection Program). These were designed for small businesses to remain open and have their employees amply kept on their payroll if attained legally. However, the choices of some who received PPP loans have led them to now be in trouble with the law. This includes some celebrities who have acquired PPP loans illegally.
Artists like Kanye West and Rae Sremmurd have reportedly acquired PPP loans. According to reports, West’s brand Yeezy LLC received two to five million dollars in funding. Rae Sremmurd’s business “Sremm Touring, LLC” received $90,500 in PPP loans as well. In addition, other entertainers who have companies such as Khloe Kardashian, Sean Combs, and Reese Witherspoon have reportedly received legal PPP loans.
In 2020, multiple outlets reported that Baby Blue from Pretty Ricky, real name Diamond Smith, had been charged with allegedly participating in a PPP loan scam. According to a press release from the Justice Department, the rapper conspired with Tonye C. Johnson, a 28-year-old owner of a Pennsylvania tow truck company, to receive $24 million in funds. Among the charges listed in the press release were conspiracy to commit wire fraud and bank fraud. They were also charged with wire fraud and bank fraud.
Months later, Vlad TV reported that the Pretty Ricky star intended on pleading guilty to the charges. Documents revealed that one of the things purchased by Baby Blue with the funds was a Ferrari that he listed as a “company car.” At the time of the announcement, the Miami native told Hollywood Unlocked that he wasn’t “trippin'” about being charged and his impending sentencing. He also boasted that he looked forward to becoming “ripped like Gucci Mane.”
Because of his actions, Baby Blue has formally been sentenced to 20 months behind bars. A report from Baller Alert also states that the judge ordered him to pay back over $1 million in damages with an additional $1.1 million in “forfeiture.” A seemingly remorseful Baby Blue took to Instagram following the news that he would now be incarcerated. In a lengthy caption, Blue shares his regrets, stating that he is aware of his inability to change the past, but will make his best attempts to change the narrative for the future. In addition, he speaks on the lessons that he’s learned through the process. “Sometimes the bad things that happens to us end up putting us on the path to the best things that will ever happen to us. Life can change in a second, can be taken in a second so live your best life,” he wrote.
Last month, the Pretty Ricky member began to make plans should he end up behind bars. In an instagram post, Baby Blue detailed the kind of woman he would need to help him get through his jail sentence. “If I get locked up, Ima need a real woman that’s gone put money on my books for commissary, answer collect calls and three way my daughter,” Baby Blue stated.
While we’re not sure if Baby Blue has found a woman to fill the position, he’s not the only public figure to come under fire for misusing PPP loan funds. Maurice “Mo” Fayne, mostly known for being romantically linked to Karlie Redd and appearing on Love and Hip Hop, is currently serving 17 years. Another man named Sheng-Wen Cheng was recently in the news as he reportedly used the names of multiple prominent figures to receive millions of dollars from the government. Cheng claimed to have been a “serial entrepreneur” with numerous companies that employed “actors, artists, and athletes,” according to a report by the Department of Justice. In addition, cheng fulfilled various personal expenses when he received the money, including a Maybach, designer goods like Louis Vuitton, and a Rolex, among other hefty purchases.
According to a recent finding from the Secret Service, hundreds of billions of dollars have also been stolen in PPP loans. Much of this could be attributed to unemployment fraud as they believe that a massive portion of the money was “improperly paid.” Investigators have reportedly prosecuted over 150 suspects as they continue to arrest and investigate countless others.