Bernie Madoff once said that “the whole government is a Ponzi scheme.” As the government passed trillions in COVID-19 stimulus spending over the past year, many Americans Ponzied the government right back.
The CARES Act and the American Rescue Plan each poured countless billions of taxpayer dollars into federal unemployment benefits, stimulus checks, and small business loans. Indeed, a Department of Labor probe discovered that state and federal officials’ lack of communication and failure to cross-reference databases caused at least 10% of unemployment aid to be improperly distributed.
Embracing the imperishable American spirit of ingenuity and entrepreneurship, some fraudsters were particularly creative and audacious in their schemes.
Here are four examples.
A rapper dropped a music video about getting rich from unemployment fraud.
A Department of Justice press release announced that Fontrell Antonio Baines — also known as “Nuke Bizzle” — used “debit cards pre-loaded with unemployment benefits administered by the California Employment Development Department.”
“Nuke Bizzle” managed to finesse $1.2 million in fraudulently obtained benefits through 92 debit cards. Over $700,000 of the benefits were obtained through cash withdrawals and “purchases of merchandise and services.”
Before his scheme was uncovered by law enforcement, Nuke “bragged about his ability to defraud the EDD in a music video posted on YouTube and in postings to his Instagram account.” In a music video entitled “EDD,” he proclaimed that he would “go to the bank with a stack of these” as he held up envelopes from the agency. Another rapper in the video said that “you gotta sell cocaine, I just file a claim.”
Facing up to 22 years in prison for device fraud, aggregated identity theft, and interstate transportation of stolen property, Mr. Bizzle’s days in the unemployment fraud racket — and the rap game — appear to be over.
A “Florida Man” — yes, really — managed to use a small business loan to buy a Lamborghini.
The Justice Department states that Miami resident David Hines “sought approximately $13.5 million in PPP loans through applications to an insured financial institution on behalf of different companies.” Once he secured $3.9 million in loans, Hines “purchased a 2020 Lamborghini Huracan sports car for approximately $318,000.”
Federal investigators caught wind of his scheme once he failed to “make the payroll payments that he claimed on his loan applications.” Nevertheless, Hines made purchases “at luxury retailers and resorts in Miami Beach.”
Slapped with one count of bank fraud, one count of making false statements to a financial institution, and one count of engaging in transactions in unlawful proceeds, Hines may no longer get to put the top down and feel the warm South Florida air.
One Big Fumble
Federal officials charged an NFL player with fraudulently seeking small business loans.
Josh Bellamy — who played for the New York Jets as a wide receiver — was charged “ for his alleged participation in a scheme to file fraudulent loan applications seeking more than $24 million” in Paycheck Protection Program loans.
Charged with wire fraud and bank fraud, Bellamy allegedly obtained “a PPP loan of $1,246,565 for his own company,” purchased “over $104,000 in luxury goods” from Dior and Gucci, and spent “approximately $62,774 in PPP loan proceeds at the Seminole Hard Rock Hotel and Casino.” He also sought loans on behalf of family members and other associates.
A businessman in Massachusetts faked his own death to avoid sentencing on charges of stimulus fraud.
David Staveley — also known as Kurt David Sanborn and David Sanborn — admitted that he and a partner filed “fraudulent PPP loan applications with a Rhode Island bank, falsely claiming they owned businesses with large monthly payrolls when, in fact, they did not own the businesses.”
Two of the businesses of which they claimed ownership — restaurants Remington House Inn and On The Trax — were closed at the time of the loan submissions. Another business — Dock Wireless — had not yet been incorporated.
The pair were “the first individuals in the nation charged with defrauding the CARES Act Paycheck Protection Program.” Three weeks after officials sent Staveley into home detention with electronic monitoring, he “removed his electronic monitoring device and fled.”
He then “staged his suicide by, among other things, leaving suicide notes with associates and in his car, which was located by the ocean in Massachusetts, unlocked and with his wallet inside.” Staveley then managed to travel through various states with several more false identities and stolen license plates.
The views expressed in this opinion piece are the author’s own and do not necessarily represent those of The Daily Wire.
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