The financial aid was meant to help those most in need during the pandemic. But millions of dollars from a COVID-19 relief fund instead are falling in the wrong hands: It’s been misspent on jewelry store spending sprees, high-stakes casino trips and glitzy cars — like a flashy Lamborghini and Ferrari.
One person used COVID-19 relief funds to spend $95,000 at jewelry stores, $62,000 at the Hard Rock Hotel and Casino, $6,630 on flights, $5,300 at Gucci, $2,000 at Dior, and $1,000 at Milano Exchange, federal prosecutors say.
Of the dozens of South Floridians accused of defrauding the government, some of them have been caught using their ill-gotten gains to live high-flying lifestyles, federal prosecutors say.
Court records obtained by the South Florida Sun Sentinel shed new light on how extensive the COVID-19 relief fraud has been across the region.
One man accused of fraud applied for and received a loan, claiming the money was for his business. Instead, he spent $95,000 at jewelry stores, $62,000 at the Hard Rock Hotel and Casino, $6,630 on flights, $5,300 at Gucci, $2,000 at Dior, and $1,000 at Milano Exchange, prosecutors say.
The defendant, Joshua Bellamy, was arrested on charges of bank and wire fraud after federal prosecutors discovered the business he used on the loan application, Drip Entertainment, no longer existed, prosecutors said.
Bellamy’s arrest is one of the 24 COVID-related fraud cases that federal prosecutors so far are pursuing across South Florida.
As the COVID-19 pandemic ravaged businesses during the spring, the government allocated $650 billion in relief funds as part of the Paycheck Protection Program, which was intended to be used on payroll costs, mortgages, rent and utilities.
That wouldn’t always go to plan, however.
A Miami man received over $4 million from the government and proceeded to go on a high-priced shopping spree, spending over $300,000 on a Lamborghini Huracan EVO, authorities said. Additionally, David Hines also spent over $24,000 at Fontainebleau, The Setai Hotel in Miami Beach, Saks 5th Avenue and Graff Diamonds.
Over the summer, loan applications began to pour in across the country, leading to millions of loans being approved, amounting to more than $521 billion by July.
During the pandemic, government agencies, ranging from federal to county level programs, have expedited their approval processes to get aid to the public much faster leading to the potential of people exploiting it for personal gain. During that time, prosecutors said, some unscrupulous applicants began testing the limits of what they could get away with.
One conspiracy, which involved multiple participants, began with a loan for $84,515, acquired with bank statements that were later deemed clear forgeries by federal authorities. Those involved then then sought larger payouts, in total submitting about 90 fraudulent applications that resulted in 42 approved loans for $24 million, according to court documents.
One of the alleged conspirators, Diamond Blue Smith, used his portion of the money on a South Florida spending spree, including $27,000 at Hard Rock Hotel and Casino; $2,290 at Versace, and $96,000 on a black Ferrari, which was designated a “company vehicle,” according to court documents.
In order to receive a loan, businesses are required to provide banks with various financial forms, including average monthly payroll expenses and the number of employees. Those figures are then used to determine how much money each company was eligible to receive.
Many found a way to cheat the system, submitting applications with lies about how many employees were on staff and inaccurate financial information, prosecutors said. In a separate case, one conspirator applied for loans at multiple banks and use the same exact financial documents, only changing details such as the account number and address.
Additionally, many defendants used other people’s personal information, such as Social Security numbers, leading to a number of identity theft charges.
Records show many have pleaded not guilty in these COVID-19 related fraud cases, including Bellamy, a former NFL wide receiver with the New York Jets. Bellamy’s attorney, Annabelle Nahra Nadler, said Bellamy “is presumed innocent by our laws” and that “all too often, professional athletes are taken advantage of by people who are purportedly acting on their behalf as agents or advisors.”