James Stote, 55, of Hollywood, Florida, and Phillip Augustin, 52, of Coral Springs, Florida, pleaded guilty Tuesday in Akron, Ohio, federal court to conspiracy to commit wire fraud, according to court records. They each face up to 20 years in prison.

"While many businesses in our communities relied upon relief funds to keep their doors open and employees paid, these defendants profited off a scheme that stole millions of taxpayer dollars intended for struggling businesses and spent it lavishly on themselves," First Assistant U.S. Attorney Michelle M. Baeppler for the Northern District of Ohio said in a statement.

According to court documents, Stote and Augustin led a group that fraudulently obtained Paycheck Protection Program loans guaranteed by the Small Business Administration under the Coronavirus Aid, Relief and Economic Security Act. Authoriteis say they initially obtained a fraudulent loan for Augustin´s company, Clear Vision Music Group LLC, using falsified documents. After that, they immediately began working to obtain larger PPP loans for themselves and their associates, the documents added.

Stote and Augustin recruited additional PPP loan applicants and prepared and submitted fraudulent loan applications for them in exchange for a share of the loan proceeds, prosecutors said. The applications they submitted for all of the loans in the scheme relied on fake payroll numbers, falsified IRS forms and phony bank statements. Prosecutors said they submitted or facilitated at least 79 fraudulent loan applications worth at least $35 million and planned to submit more.

As part of the same scheme, Diamond Smith, 37, of Miramar, Florida, was sentenced Thursday to one year and eight months after pleading guilty in August in South Florida to conspiracy to commit wire fraud. Smith, businesslogr.com a recording artist, obtained two PPP loans, for $426,717 and $708,065, and paid more than $250,000 to Stote and Augustin as kickbacks for their assistance in preparing and submitting the fraudulent loan applications, officials said.

A total of 25 people have been charged in Ohio, Florida and North Carolina for their participation in this scheme, with 20 convictions, so far, according to authorities.

The Paycheck Protection Program represents billions of dollars in forgivable small business loans for Americans struggling because of the COVID-19 pandemic. It´s part of the Coronavirus Aid, Relief and Economic Security Act, which became federal law in March 2020.

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For the first time, DailyMail.com can reveal the exact amounts that these wealthy companies got through the Payment Protection Program, which was set up for desperate businesses hit by the Covid pandemic.

In all but two of the cases we examined, the company was 'forgiven' despite the star owners being multi-millionaires. The status of the others is unknown.

The loan program cost US taxpayers $953billion, with the University of Texas estimating that 15 percent of PPP claims - around $76billion - were fraudulent.

It was claimed that after the first round of PPP loans, up to 90 percent of ethnic minority business owners were unsuccessful at getting the loan and were at the 'end of a line', according to an Associated Press survey, which showed a disproportionate amount of white people in rich areas being approved for a loan.

Yet celebs and their businesses had no problems.

Kanye West's Yeezy LLC, based in La Palma, California, borrowed $2,363,585, with $1,772,689 being spent on payroll for 106 staff

Jay-Z is associated to two firms approved for a loan two years ago. Malibu Entertainment is linked to his streaming platform Tidal and took $2,106,398 to secure 95 jobs and was let off of repaying the full amount

DailyMail.com can now reveal the exact amounts that these millionaires - and some billionaires - took out via the government program

Kanye West's Yeezy LLC, based in La Palma, California, borrowed $2,363,585, with $1,772,689 being spent on payroll for 106 staff.

Khloe Kardashian's denim brand Good American LLC had a loan of $1,245,405 approved on April 14, https://businesslogr.com/do-cash-app-accept-ppp-loan/ 2020, mostly for the payroll of 57 workers. The full amount, plus interest, was forgiven

Yeezy's Adidas sneaker line's profits increased during the pandemic from $1.3 billion in 2020 to $1.7 billion in 2021, a rise of 31 percent.

Kanye West himself has a net worth of about $2billion.  

A subsidiary, Yeezy Schloss LLC, borrowed $15,625 for one employee and was forgiven all but $147.

A loan will be forgiven, including the one percent interest, through a complicated calculation based on the amount, how many employees were maintained during the coronavirus crisis and on what hours/wages were compared to pre-covid.

Kanye's one-time sister-in-law Khloe Kardashian's denim brand Good American LLC had a loan of $1,245,405 approved on April 14, 2020, mostly for the payroll of 57 workers. 

The full amount, plus interest, was forgiven.

Khloe's net worth is reportedly $60million.   

The company is said to be worth $12.7 million and made $1million in sales on its first day of business in 2016.

Jay-Z is associated to two firms approved for a loan two years ago.

Malibu Entertainment is linked to his streaming platform Tidal and took $2,106,398 to secure 95 jobs and was let off of repaying the full amount.

His champagne brand Armand De Brignac Holdings - where he holds a 50 percent stake - borrowed $293,119 for payroll, which was fully disbursed. It is not stated if the loan was paid back. 

Sean Combs's cable network, Revolt Media and TV LLC, took $1,929,252 for 134 jobs, which was forgiven.

The two rappers are among the highest paid celebrities in the world, with Jay-Z worth $1.3billion, while Combs, aka Puff Daddy or Diddy, is just behind with a net worth of $900million.

Sean Combs' cable network, Revolt Media and TV LLC, took $1,929,252 for 134 jobs, which was forgiven

Tom Brady's company, TB12 Inc, was given $960,855 to help secure 80 jobs. The full amount, plus interest of nearly $12,000, is fully forgiven. Brady co-founded the company with body coach Alex Guerrero

Reese Witherspoon's clothing company, Draper James LLC, was given $975,472 in the first PPP round for payroll and rent, and had the loan wiped out

NFL legend Tom Brady is set to become the game's first ever billionaire when he eventually retires with part of his income coming from the wellbeing site TB12, based on the Tom Brady diet, which he co-founded with body coach Alex Guerrero.

The company, TB12 Inc, was given $960,855 to help secure 80 jobs. The full amount, plus interest of nearly $12,000, is fully forgiven.

Jeff Koons is America's richest artist, but his firm Jeff Koons LLC still applied for $1,091,200 to keep 53 jobs, which was fully forgiven.

Reese Witherspoon's clothing company, Draper James LLC, was given $975,472 in the first PPP round for payroll and rent, and had the loan wiped out.

Jeff Koons is America's richest artist, but his firm Jeff Koons LLC still applied for $1,091,200 to keep 53 jobs, which was fully forgiven

Green Day Inc and Green Day Touring Inc succeeded with three loans between them, worth $452,302 for 39 jobs, with it all being forgiven apart from $66,000

Some rock bands succeeded in their firms being bailed out by government, as the music scene was forced to shutdown.

Pearl Jam Touring Inc had its $629,335 loan forgiven after saving 28 jobs.

Green Day Inc and Green Day Touring Inc succeeded with three loans between them, worth $452,302 for 39 jobs, with it all nearly being forgiven, less $66,000.

The movie industry was also badly hit by lockdowns. Legendary director's firm Francis Ford Coppola Presents LLC was approved for a loan of $7,147,038, which covered the wages of 469 workers and didn't have to be repaid.

Political figures also cashed in on the government program. 

Jared Kushner's family were granted three PPP loans for their various businesses. 

The Kushner family's newspaper publisher Observer Holdings, LLC was approved in the first round of loans on April 27, 2020. The company got a $800,407 loan used toward payroll, utilities, rent and saved 41 jobs. 

The loan, including interest, was forgiven in full. 

The Kushner family hotel business Princeton Forrestal, LLC was approved for a $1,569,977 loan also in April 2020. The funds went to payroll, saving 196 jobs. The loan, including interest, was cleared. 

Esplanade Livingston, LLC, which owns the land housing Kushner's family's Westminster Hotel in New Jersey, was granted a $630,735 loan, which went to paying 56 employees. The entire loan was forgiven. 

Jared Kushner's family were granted three PPP loans for their various businesses. All three loans were forgiven, including interest

Esplanade Livingston LLC, which owns the land housing Kushner's family's Westminster Hotel in New Jersey, was granted a $630,735 loan, which went to paying 56 employees. The entire loan was forgiven

House Speaker Nancy Pelosi's husband Paul Pelosi has a 8.1 percent share in EDI Associates, a restaurant business which took out two PPP loans, totally over $1million. Both loans were forgiven in full 

House Speaker Nancy Pelosi's husband Paul Pelosi has a 8.1percent share in EDI Associates, a restaurant business which took out two PPP loans. 

EDI Associates, based in San Rafael, was granted a $711,708 loan. The loan went to the salaries of 52 employees. 

EDI Associates, this time based in Sonoma, California, applied for a loan in February 2021, and was granted $996,392. 

In both cases, the loans, including interest, were forgiven.  

Earlier this month, President Joe Biden signed a bill that will give the Justice Department more time to investigate and prosecute those who fraudulently collected PPP loans. 

In March, Biden vowed, 'We're going after the criminals who stole billions in relief money meant for small businesses and millions of Americans.'

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Tracking PPP: Search Every Company Approved for Federal Loans - ProPublica



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