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NFL player falsified pandemic loan applications, used proceeds to buy Dior, Gucci luxury goods: DOJ

NFL wide receiver Josh Bellamy was arrested for allegedly using $24 million dollars in coronavirus relief funding to buy high-end luxury items and more. Yahoo Finance's Alexis Keenan joins The First Trade with Alexis Christoforous and Brian Sozzi to discuss.

Video Transcript

BRIAN SOZZI: Welcome back to "The First Trade." NFL wide receiver Josh Bellamy has a lot of folks in the NFL just shaking their heads. The wide receiver has been arrested for allegedly misusing government pandemic loans. He reportedly used the funds to buy swag from Gucci and Dior and casino trips. Yahoo Finance's Alexis Keenan is here with more. Really, Alexis?

ALEXIS KEENAN: Yeah, not good news here, Brian, and a lot of fraud happening with the PPP program. And the DOJ has prosecuted so far 57 different defendants, Bellamy being one of them announced yesterday. He was arrested in Miami yesterday.

Now, the DOJ's charges against Bellamy are wire fraud, bank fraud, and conspiracy. They allege that he was part of a scheme along with 10 other defendants where they allegedly filed these fraudulent PPP loan applications, in total trying to steal $24 million, $17.4 million of which was actually paid out. Of course, the PPP loans we've all come to be so familiar with, those are the forgivable government loans that were offered to small businesses, under 500 employees, to weather the economic downturn from the COVID-19 pandemic.

Now, prosecutors say that Bellamy obtained more than $1.2 million for his own company. That's called Drip Entertainment. According to the complaint, Bellamy claimed he had 47 employees on his staff, though according to the "Chicago Tribune," IRS records show that he had no payroll payouts at all in 2020.

The department said that $104,000 of that money he obtained was used on things, luxury goods at Gucci, at Christian Dior. Another $62,000 they say spent at the Hard Rock Hotel and Casino in Florida, and also saying he withdrew $302,000 from that loan money. Now, of course, fraud was expected from the ease with which these loans were being distributed. So far since May, the DOJ has charged those 57 defendants, totaling up to $175 million in PPP fraud.

So far, the government has gotten back about $30 million. And actual losses so far have been $70 million, though. These are serious charges. Each of these charges that Bellamy is facing come with up to 20 years in federal prison, as well as $250,000 in fines.

BRIAN SOZZI: Alexis Keenan, thanks so much.