Criminal Information — U.S. v. Diamond Blue Smith

Record facts

U.S. District Court, S.D. Fla. · No. 1:21-cr-20001-MGC · Doc. 15 · 2021-01-05 · Docket on CourtListener

Full text

UNITED STATES DISTRICT CO URT
SOUTHERN DISTRICT OF FLORIDA
Case No.
18 U.S.C. j 371
18 U.S.C. j 982
UNITED STATES OF AM ERICA
VS.
DIAM OND BLUE SM ITH,
Defendant.
INFORM ATION
The United States Atlorney charges that:
G ENER AL ALLEGATIONS
At all tim es m aterial to this Inform ation:
The Pavcheck Protection Proeram
1 . The Coronavirus Aid, Relief, and Economic Security'tticAltEs'') Act was a federal
law enacted in or arotmd M arch 2020 and designed to provide em ergency tinancial assistance to
the m illions of Americans who are suffering the economic effects caused by the COVlD-19
pandemic. One source of relief provided by the CARES Act was the authorization of forgivable
loans to small businesses forjob retention and certain other expenses, through a program referred
to as the Paycheck Protection Program (:TPP'').
In order to obtain a PPP loan, a qualifying business submitted a PPP loan application,
which was signed by an authorized representative of the business. The PPP loan application
required the business (through its authorized representative) to acknowledge the program rtzles and
make certain affirmative certifications in order to be eligible to obtain the PPP loan. ln the PPP
21-20001-CR-COOKE/O'SULLIVAN
Jan 5, 2021
JA
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 1 of 11

loan application (Small Business Administration (11SBA'') Form 2483), the small business (through
its authorized representative) was required to provide, nmong other things, its: (a) average monthly
payroll expenses', and (b) number of employees. These figures were used to calculate the amount
of m oney the sm all business was eligible to receive under the PPP. In addition, businesses
applying for a PPP loan were required to provide docum entation confirm ing their payroll expenses.
A PPP loan application was processed by a participating lender. If a PPP loan
application was approved, the participating lender funded the PPP loan using its own m onies.
W hile it was the participating lender that issued the PPP loan, the loan was 100%  guaranteed by
the SBA . Data from the application, including information about the borrower, the total am ount
of the loan, and the listed number of em ployees, was transm itted by the lender to the SBA in the
course of processing the loan.
PPP loan proceeds were required to be used by the business on certain permissible
expenses- payroll costs, interest on m ortgages, rent, and utilities. The PPP allowed the interest
and principal on the PPP loan to be entirely forgiven if the business spent the loan proceeds on
these expense item s within a designated period of time and used a defined portion of the PPP loan
PCoceeds On Payfoll expenses.
The Defendant. Related Entities and Individuals
Throwbackjerseys.com, LLC (Ct-l-hrowbackjerseys.com'') was a Florida comoration
with its listed principal address at 7958 Pines Blvd, PM B 453, Pembroke Pines, FL 33024.
Blue Star Records, LLC (ûtBlue Star Records'') was a Florida corporation with its
listed principal address at 401 1 N .W . 194th Street, M iami Gardens, FL 33056.
Defendant DIAM O ND BLUE SM ITH was a resident of Broward County, Florida,
and was the manager and registered agent of Throwbackjerseys.com and Blue Star Records.
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 2 of 11

8.
Bank 1 was a financial institution based in Salt Lake City, Utah, that was insured
by the Federal Deposit lnsurance Corporation (çTDIC''). Bank 1 was an approved SBA lender of
PPP loans.
Bank Processor 1 was a third-party com pany processor, based in Redwood City,
California, that processed PPP loan applications for Bank 1.
10. 
Individual 1 was a resident of Broward County, Florida.
1 1. 
Individual 2 was a resident of Broward County, Florida.
Conspiracy to Com m it W ire Fraud
(18 U.S.C. j 371)
From in or arotmd M ay 2020, through in or around August 2020, in M iam i-Dade and
Broward Counties, in the Southern District of Florida, and elsewhere, the defendant,
DIAM OND BLUE SM ITH,
did willfully, that is, with the intent to further the object of the conspiracy, and knowingly combine,
conspire, confederate, and agree with lndividual 1 and with others known and unknown to the
United States Attorney, to knowingly, and with the intent to defraud, devise, and intend to devise,
a scheme and artitice to defraud, and to obtain m oney and property by m eans of m aterially false
and fraudulent pretenses, representations, and promises, knowing that the pretenses,
representations, and promises were false and fraudulent when m ade, and, for the purpose of
executing the scheme and artifice, did knowingly transmit and cause to be transm itted, by m eans
of wire comm unication in interstate and foreign comm erce, certain writings, signs, signals,
pictures and sounds, in violation of Title 18, United States Code, Section 1343.
PURPO SE OF THE CONSPIM
CY
lt was the purpose of the conspiracy for the defendant and his co-conspirators to
unlawfully enrich themselves by, among other things: (a) submitting and causing the submission
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 3 of 11

of false and fraudulent applications for loans and grants m ade available through the SBA to provide
relief for the economic effects caused by the COVID-19 pandemic, including PPP loans; (b)
offering, paying, and receiving kickbacks in return for referring other individuals for the
submission of false and fraudulent loan applications', and (c) diverting fraud proceeds for the
defendant's and co-conspirators' personal use, the use and benefit of others, and to f'urther the
conspiracy.
M ANNER AND M EANS OF THE CONSPIM CY
The manner and m eans by which the defendant and his co-conspirators sought to
accomplish the object and purpose of the conspiracy included, nmong others, the following:
DIAM OND BLUE SM ITH , lndividual 1, and other co-conspirators subm itted and
caused the submission of fraudulent PPP loan applications for Throwbackjerseys.com, Blue Star
Records and other entities, via interstate wire comm unications.
14. 
The PPP loan applications submitted by DIAM OND BLUE SM ITH , Individual 1
and other co-conspirators for Throwbackjerseys.com, Blue Star Records, and other entities
included falsified bank statem ents and payroll tax forms, among other things, and falsely and
fraudulently represented the borrowing entities' num ber of em ployees and am ount of m onthly
payroll.
DIAM OND BLUE SM ITH , lndividual 1, and other co-conspirators recruited co-
conspirators to subm it additional fraudulent PPP loan applications, often in exchange for
kickbacks from the fraudulently obtained PPP loans.
16. 
As a result of such false and fraudulent PPP loan applications, Bank 1 and other
participating banks disbursed m illions of dollars' in PPP loan proceeds, which were transferred
to DIAM OND BLUE SM ITH , lndividual 1, and other co-conspirators via interstate wire
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 4 of 11

transmissions.
OVERT ACTS
In furtherance of the conspiracy, and to accomplish its object and purpose, at least one of
the co-conspirators com mitted and caused to be com mitled, in the Southern District of Florida and
elsewhere, at least one of the following overt acts, am ong others:
On or about M ay 17, 2020, lndividual 1 sent DIAM OND BLUE SM ITH a text
m essage that stated: ûtl-li please call m e working on your sba file.''
On or about M ay 18, 2020, DIAM OND BLUE SM ITH sent lndividual 1 a text
m essage contirming that he had been able to çllog in.''
On or about M ay 18, 2020, lndividual 1 electronically subm itted false and
fraudulent documents on behalf of Throwbackjerseys.com to Bank 1 through Bank Processor l ,
including false payroll tax forms falsely stating that Throwbackjerseys.com had a quarterly payroll
of more than $500,000, for 20 employees.
4. 
On or about M ay 18, 2020, DIAM OND BLUE SM ITH electronically signed the
PPP loan application fonn for Throwbackjerseys.com using his initials EIDBS.'' The application
form requested a loan amount of $426,717, based on the false representations that the company
had 21 employees and an average monthly payroll of $170,687.
On or about M ay 18, 2020, DIAM OND BLUE SM ITH sent lndividual 1 a text
m essage with a screenshot of a m essage from Bank Processor 1 stating, Sç-l-hank you for accepting
your offer for the Paycheck Protection Program . W e've initiated an ACH deposit into the bank
account you provided in your application.''
On or about M ay 18, 2020, DIAM OND BLUE SM ITH sent text m essages to
lndividual 1 that contained information for Blue Star Records,including bank nam e, account
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 5 of 11

number, routing number, bank address, Em  tax ID num ber, business address, and the name
LtSM ITH, DIAM OND,'' as the individual associated with the business.
On or about M ay 20, 2020, DIAM OND BLUE SM ITH sent a wire transfer
payment of $90,000 from the Throwbackjerseys.com bank account to Individual 1 's bank account.
8. 
On or about M ay 21, 2020, DIAM OND BLUE SM ITH sent a text m essage to
lndividual 1 with infonnation regarding the referral of an individual into the scheme. This text
message included the business name, date of incorporation, Em  tax ID number, business address,
bank account number, the nnm e of the individual associated with the business, em ail address, and
phone num ber.
On or about M ay 21, 2020, DIAM OND BLUE SM ITH sent a text m essage to
Individual 1 asking what information was ççneeded for bluestar'' and confinned to lndividual 1 that
Blue Star Records was his company.
10. 
On or about M ay 21, 2020, lndividual 1 electronically subm itted false and
fraudulent documents on behalf of Blue Star Records to Bank 1 through Bank Processor 1,
including false payroll tax form s that falsely and fraudulently stated that Blue Star Records had a
quarterly payroll of more than $800,000, for 35 employees, and that falsely and fraudulently
represented lndividual 2 as the owner of Blue Star Records. The PPP loan application form
requested a loan amount of $708,065 for Blue Star'Records.
On or about M ay 26, 2020, after receiving a PPP loan of $708,065 for Blue Star
Records, DIAM OND BLUE SM ITH sent a wire transfer payment of $50,000 from the Blue Star
Records bank account to the barlk account belonging to Individual l .
12. 
On or about June 4, 2020, DIAM OND BLUE SM ITH sent lndividual 1 a text
message with a second referral of an individual into the schem e, referencing çkanother client.'' The
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 6 of 11

message attached a hand-written note with the individual's nam e, address, cell phone ntunber,
social security number, date of birth, em ail address, banking infonnation, nam e and address of the
business.
Al1 in violation of Title 18, United States Code, Section 37l .
FO RFEITURE ALLEGATIONS
The allegations contained in this Information are hereby re-alleged and by this
reference fully incorporated herein for the purpose of alleging forfeiture to the United States of
certain property in which the defendant, DIAM O ND BLUE SM ITH, has an interest.
Upon conviction of a violation of Title 18, United States Code, Section 371, as
alleged in this lnformation, the defendant shall forfeit to the United States any property
constituting, or derived from, any proceeds the defendant obtained, directly or indirectly, as the
result of such violation pursuant to Title 18, Unitèd States Code, Section 982(a)(2)(A).
The property subject to forfeitlzre includes, but is not limited to, a 2010 black Ferrari
458 Italia, bearing vehicle identification number ZFF67NFA0A0175340.
lf any of the property subject to forfeiture, as a result of any act or omission of the
defendant'.
a. cannot be located upon the exercise of due diligence;
b. has been transferred or sold to, or deposited with, a third party;
c. has been placed beyond the jurisdiction of the court;
d. has been substantially dim inished in value; or
e. has been com mingled with other property which cannot be divided without difficulty,
the United States shall be entitled to the forfeiture of substitute property under the provisions of
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 7 of 11

Title 21, United States Code, Section 853(p).
All pursuant to Title 18, United States Code, Section 982(a)(2)(A), and the procedtlres set
forth in Title 21, United States Code, Section 853, as incorporated by Title 18, United States Code,
Section 982(b)(1).
A 
FAJA O ORSHAN
UN1 D STAT ATTORNEY
W *@
AIM EE C. JI ENEZ
ASSISTANT UN ITED STATES ATTOM EY
G f
PHl IP B. TROUT
T 
L ATTORNEY, FRAUD SECTION
- W 
* 
ûu'; -
bANiYL . HN
ACTING C 
F, FRAUD SECTION
8
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 8 of 11

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
UNITED STATES OF AM ERICA
Diam ond Blue Sm ith,
Defendant. 
/
Court Divijion: (select Onel
?' 
M laml 
Key W est
FTL 
W PB 
FTP
CERTIFICATE OF TRIAL ATTORNEY*
Superseding Case Inform ation:
New defendantt l
s 
Yes
Number of new defendants
Total number of counts
3.
4.
l
11
lll
IV
V
6. 
Has this case previously been filed in this District Court?
lf yes: Judge 
Case No.
(Attach copy of dispositive order)
Has a complaint been filed in this matter? 
(Yes or No) 
YeS
If yes: Magistrate Case No. 
20-mi-03723-EGT
Related miscellaneous numbers:
Defendantts) in federal custody as of 
Arrested on October 5. 2020 - not in custodv
Defendantts) in state custody as of
Rule 20 from the District of
ls this a potential death penalty case? (Yes or No) 
No
l have carefully considered the allegations of the indictment, the number of defendants, the number of
probable witnesses and the legal complexities of the lndictm ent/lnformation attached hereto.
I am aware that the information supplied on this statement will be relied upon by the Judges of this
Court in setting their calendars and scheduling criminal trials under the mandate of the Speedy Trial
Act, Title 28 U.S.C. Section 3161.
lnterpreter: 
(Yes or No) 
No
List language and/or dialect
This case will take 0 days for the parties to try.
Please check appropriate category and type of offense listed below:
(Check only one) 
(Check only one)
0 to 5 days 
/ 
Petty
6 to 10 days 
Minor
l l to 20 days 
Misdem.
21 to 60 days 
Felony 
z
61 days and over
(Yes or No) 
No
Does this case originate from a m atter pending in the Central Region of the U.S. Attorney's Office
prior to August 9, 2013 (M ag. Judge Alicia 0. Valle)? 
Yes 
No d
Does this case originate from a m atter pending in the Northern Region of the U.S. Attorney's Office
prior to August 8, 2014 (M ag. Judge Shaniek Maynard)? 
Yes 
No ?'
8.
Does this case originate from a matter pending in the Central Region of the U.S. Attorney's Oftk e
prior to October 3, 2019 (Mag. Judge Jared Strauss)? 
Yes 
No z
AIM EE C. Jl EN
ASSISTANT UNITED STATES ATTORNEY
Court No. A5500795
lpenalty Sheetts) attached 
Itl!v 6/5/2020
9.
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 9 of 11

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
PENALTY SHEET
Defendant's Nam e: DIAM OND BLUE SM ITH
Count #: l
Conspiracv to Comm it an Offense acainst the United Statess i.e.. W ire Fraud
Title 18s United States Codes Section 371
* Max. Penalty: 
Five (5) years' imprisonment
*Refers only to possible term of incarceration, does not include possible fines, restitution,
special assessm ents, parole term s, or forfeitures that m ay be applicable.
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 10 of 11

AO 455 (Rev. 01/09) Waiver of an lndictment
U NITED STATES D ISTRICT COURT
for the
Southern District of Florida
United States of Am erica
V.
DIAMOND BLUE SMITH,
Dejkndant
)
) 
Case No.
)
)
)
W AIVER OF AN INDICTM ENT
l understand that l have been accused of one or m ore offenses punishable by imprisonm ent for more than one
year. l was advised in open court of my rights and the nature of the proposed charges against me.
After receiving this advice, l waive my right to prosecution by indictm ent and consent to prosecution by
infonnation.
Date: 
01/05/2021
/s/ Diamond Blue Smith
De#ndant 's signature
IsI Adriana Collado-Hudak
Signature ofdefendant 's attorney
Adriana Collado-Hudak
Printed name ofde#ndant 's attorney
Case 1:21-cr-20001-MGC   Document 15   Entered on FLSD Docket 01/05/2021   Page 11 of 11

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