Celebrities Cash In on COVID-Relief Fraud

To borrow a line from the movie Taken, the U.S. government has a “particular set of skills.” It borrows trillions of dollars and it spends trillions of dollars. Unlike Liam Neeson’s character in Taken, Uncle Sam isn’t particularly good at either of these skills.

After state and local governments shuttered businesses and mandated residents stay-at-home in the early months of the coronavirus epidemic, the federal government borrowed and spent like nobody’s business to provide relief to businesses and individuals who became unemployed as a result of the lockdowns. When all was said and done, the federal government borrowed and spent at least $1.55 trillion just on COVID-19 relief during its 2020 fiscal year.

Most of that money was dished out to businesses in the form of the Paycheck Protection Program (PPP) and to individuals in the form of unemployment benefits. Because federal bureaucrats couldn’t be bothered to carefully steward that money, a lot of it has been wasted through fraud. Two criminal cases involving celebrities who received roughly $1.2 million each drive that point home.

Fraud in the PPP

The first case involves the PPP, where New York Jets wide receiver Josh Bellamy was charged in a number of fraud-related crimes by the U.S. Department of Justice for receiving $1.2 million in PPP loans.

Joshua J. Bellamy, 31, of St. Petersburg, Florida, a player in the NFL, was charged in a federal criminal complaint filed in the Southern District of Florida with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud. Bellamy was arrested this morning and will appear today before U.S. Magistrate Judge Christopher Tuite of the Middle District of Florida.

The complaint alleges that Bellamy conspired with others to obtain millions of dollars in fraudulent PPP loans. Early in the scheme, Phillip J. Augustin allegedly obtained a fraudulent PPP loan for his talent management company using falsified documents. After submitting that application, Augustin then began to work with other co-conspirators, including Bellamy, on a scheme to submit numerous fraudulent PPP loan applications for confederate loan applicants, in order to receive kickbacks for obtaining the forgivable loans for them.

Bellamy is alleged to have obtained a PPP loan of $1,246,565 for his own company, Drip Entertainment LLC. Bellamy allegedly purchased over $104,000 in luxury goods using proceeds of his PPP loan, including purchases at Dior, Gucci, and jewelers. He is also alleged to have spent approximately $62,774 in PPP loan proceeds at the Seminole Hard Rock Hotel and Casino, and to have withdrawn over $302,000. Bellamy also allegedly sought PPP loans on behalf of his family members and close associates.

In 2019, Bellamy signed a two-year, $5 million contract with the New York jets, with $930,000 guaranteed, whether he ever played in a game or not during the length of the contract.

Fraud at the EDD

The second story is more local in nature, since unemployment benefits are managed through state employment offices, but involves a federal crime. In California, the Employment Development Department (EDD) of the state government is responsible for processing claims and dispersing checks to self-employed and gig workers who qualify for federally-funded Pandemic Unemployment Assistance.

Except the EDD has proven to be really bad at managing U.S. taxpayer dollars and may be even worse than Uncle Sam where this skill is involved!

That’s why the story of rapper Fontrell Antonio Baines, also known as “Nuke Bizzle”, stands out. Los Angeles broadcaster CBSLA tells the tale:

A rapper who bragged in a YouTube music video about getting rich from an unemployment scam was arrested Friday on federal charges of fraudulently applying for more than $1.2 million in jobless benefits, the Department Of Justice officials said.

Fontrell Antonio Baines, 31, of Memphis, Tenn., is known online as Nuke Bizzle. Federal officials say he is currently a resident in the Hollywood Hills and is expected to make his first court appearance Friday afternoon in U.S. District Court in downtown Los Angeles.

Baines was arrested Sept. 23 by Las Vegas police and was found to be in possession of eight EDD debit cards, seven of which were in the names of other people, according to an affidavit filed with the criminal complaint against Baines.

In the video, which apparently was posted on Sept. 11, prosecutors say Baines rapped about doing “my swagger for EDD” and getting rich by “go[ing] to the bank with a stack of these” while holding up a several envelopes from EDD. A second man in the video raps, “you gotta sell cocaine, I just file a claim...”

While the rapper’s video could be removed from YouTube, CBSLA‘s video of its news coverage of the story is available.

Lessons Learned from Cheating the PPP and the EDD

Aside from both Bellamy and Baines being charged for fraud in receiving around $1.2 million each in U.S. taxpayer-funded dollars, both stories demonstrate the negligence of the bureaucrats charged with managing the welfare assistance programs they administer.

The U.S. taxpayers whose earnings are taxed to repay the loans the government borrows to spend this badly deserve better. The bureaucrats should be made personally liable for recovering the losses. If they cannot recover the funds from the fraudsters who exploited the system they manage, perhaps they would be more fiscally prudent if they had to pay back the funds lost to fraud through their negligence out of their own pockets and pensions.

How would Liam Neeson’s character in Taken solve the problem?

Craig Eyermann is a Research Fellow at the Independent Institute and the creator of the Government Cost Calculator at MyGovCost.org.
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