Platinum-Selling Rapper Pleading Guilty to COVID-19 Relief Fraud Charges

Diamond "Baby Blue" Smith, a member of the Florida rap group Pretty Ricky, has reportedly agreed to plead guilty to charges stemming from a federal COVID-19 relief fraud case. In October 2020, the U.S. Justice Department arrested Smith, 36, for allegedly filing fraudulent loan applications seeking thousands of dollars in Paycheck Protection Program (PPP) loans. Smith will plead guilty to at least one federal charge, according to court records, reports VladTV.

Smith is scheduled to appear before U.S. District Judge Marcia Cooke on June 9 to enter his guilty plea. The rapper's attorney and federal prosecutors have not announced what charge he is pleading guilty to or what sentence they will seek. Before the change of plea hearing was scheduled, Smith's attorney asked the court to postpone the trial, which was scheduled to start in April. In the motion, the defense noted that Smith was shot in Davie, Florida on April 19 and was still in critical condition at the time.

Following VladTV's report, Smith spoke with HollywoodUnlocked, appearing to confirm he was planning to plead guilty. He said he was not "tripping" over the situation. "Thankful to be alive! All glory to God! Love my fans, family, and friends for sticking with a n— through everything! All them prayers definitely saved my life," he said. “Only thing ima really miss is time away from my kids. I just had a baby boy this year and Ima miss his little giggles for sure!”

Smith and Tonye C. Johnson, 28, of Flourtown, Pennslyvania were charged with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud, federal prosecutors announced in October. According to the federal criminal complaints, Smith, Johnson, and others plotted to get millions of dollars in PPP loans, which were guaranteed by the Small Business Administration through the CARES Act. Smith allegedly got a $426,717 loan for his company Throwbackjersey.com LLC with fake documents. After he used that loan, he allegedly used fake documents to get another loan of over $700,000 for his other company Blue Star Records LLC. However, federal authorities discovered that Smith allegedly used $96,000 from the loans to buy a Ferrari and make other luxury purchases. The Ferrari was seized when Smith was arrested. According to the complaint, Smith withdrew over $270,000 in loan proceeds and he also allegedly sought PPP loans for other friends.

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The scheme allegedly started after Phillip J. Augustin obtained a fraudulent PPP loan for his talent management company using falsified records. After he submitted that application, Augustin worked with Smith, Johnson, and other co-conspirators to file for fake PPP loans. The conspirators allegedly applied for PPP loans worth over $24 million together, and over $17.4 million was paid out. In addition to Johnson and Smith, 11 other defendants were charged in the case.

Smith found success as a member of Pretty Ricky, which scored hits in the 2000s with their gold-selling albums Bluestars (2005) and Late Night Special (2007). They scored platinum singles with "Grind With Me" and "On the Hotline." Smith has continued recording solo, releasing his latest single, "Up Again," on Friday.