Ex-New York Jets and Chicago Bears wide receive Josh Bellamy was charged with federal wire fraud, bank fraud, and conspiracy last week for participating in a scheme involving $25 million in phony Payroll Protection Program (PPP) loan applications.
The US Department of Justice reported that Bellamy sought PPP loans for himself, his family, and friends. Among 90 fake applications, most of them were submitted to the government and obtained payouts of $17.4 million.
Bellamy Illegally Obtained Public Money and Spent on Luxury Goods
Bellamy allegedly obtained at least $1.2 million for his Drip Entertainment LLC. He also spent $104,000 on luxury items from Gucci and Dior. Another $63,000 was spent at a Hard Rock Hotel and Casino. He also allegedly withdrew more than $302,000 in illegal funds and attempted to get PPP loans for his family members and friends.
PPP loans are back by the Small Business Administration under the CARES Act. They offer emergency financial assistance in the form of forgivable loans for businesses affected by the COVID-19 pandemic.
Bellamy was arrested by federal agents last Thursday and was supposed to appear in federal court in the Southern District of Florida.
Co-Conspirator Also Filed Phony Documents With PPP Program
DOJ also announced that co-conspirator Phillip J. Augustin used a talent management company to file fake applications with the PPP program. He later brought Bellamy into a scheme to submit many fake PPP loan applications for others. Bellamy is one of 10 co-conspirators who came up with the fraud to get kickbacks to get forgivable loans for other people.
The criminal complaint shows that to get the loans, they submitted fake bank statements and fake payroll tax forms but did not make any changes. The conspirators used the same versions of the false bank statements and recycled the same PPP applications for several companies with few changes.
Florida state records say that Bellamy’s company, based in St. Petersburg, registered as an LLC in 2018 and renewed its business license on Sept. 9, 2020.
If convicted, Bellamy faces up to 20 years in prison on each fraud charge and fines of $250,000.
Jets Released Bellamy from PUP List Last Week
The Jets reported last week that they released Bellamy from the physically unable to perform list. The team stated it did not know about the arrest before he was released. He had been recovering from a severe shoulder injury after he ended last season.
Before he was with the Jets, Bellamy broke into the NFL in 2012 as an undrafted free agent from Louisville. He was with Kansas City for one year before he went to Washington and Chicago. When he was with the Bears, he had the most success of his career. In 2017, he had 24 receptions for 376 yards and one touchdown.
After five seasons with the Bears, Bellamy inked a two-year $5 million contract with the jets. He played mostly on special teams during seven games and had two receptions for 20 yards.
Federal Government Aggressively Pursuing PPP Fraudsters
Congress and the White House passed the $2 trillion stimulus last March to reduce the blow from the mass business shutdowns due to the pandemic. The federal relief legislation had forgivable loans in the PPP program intended to keep small businesses going during the crisis.
But in recent months, federal agents have unsealed federal charges against many people who illegally obtained PPP loans and charging them with PPP loan fraud. The Criminal Division at the Justice Department said they had charged at least 50 people for applying for illegal PPP loans to steal money and buy luxury goods.
The federal government stated that the rapid injection of trillions of PPP dollars into the economy created a high fraud risk when many companies and employees were operating under increased financial pressure that can lead to embezzlement and fraud.
For example, seven people in Georgia were charged with fraud and money laundering at least $2.1 million obtained from PPP funding.
The seven accused used several methods to launder the money, including a casino. One of the men submitted a phony PPP application for his company Wild Stylz Entertainment LLC. He submitted fake supporting documents that made incorrect claims about his number of employees and payroll expenses.
The financial institution approved and funded a loan of $400,000. Most of the funds were used to gamble and buy luxury goods. Other business owners agreed to let the man use their business bank accounts to launder some of the money in exchange for a percentage of the illegal funds put into their accounts.
- NFL Player Falsified Pandemic Loans Applications. Accessed at https://finance.yahoo.com/news/doj-nfl-player-falsified-pandemic-loan-applications-205443838.html
- Joshua Bellamy Charged With Fraud in Coronavirus Relief Scam. Accessed at https://www.msn.com/en-us/news/us/joshua-bellamy-nfl-player-charged-with-fraud-in-coronavirus-relief-scheme/ar-BB18ULSb
- Four from Georgia Charged in $2.1 Million Money Laundering Scheme. Accessed at https://allongeorgia.com/georgia-public-safety/4-from-georgia-charged-in-2-1-million-money-laundering-scheme-from-ppp-funding/