United States v. Diamond Blue Smith — U.S. District Court, S.D. Fla.

Case summary

Diamond Blue Smith was prosecuted in the U.S. District Court for the Southern District of Florida, No. 1:21-cr-20001-MGC, over Paycheck Protection Program loans. A criminal complaint filed October 1, 2020 charged wire fraud, bank fraud and attempt and conspiracy to commit wire fraud and bank fraud. He waived indictment, was charged by information on January 5, 2021 with one count of conspiracy to commit wire fraud under 18 U.S.C. § 371, and pleaded guilty on August 4, 2021. The government's sentencing memorandum states that two loans, $426,717 for Throwbackjerseys.com and $708,065 for Blue Star Records, gave him $1,134,782 in PPP funds, and recommends 37 months. On December 16, 2021 the court sentenced him to 20 months in prison and three years of supervised release and ordered $1,111,345.23 in restitution, owed jointly and severally with James Stote and Philip Augustin (judgment, Doc. 51, entered December 17, 2021).

Case at a glance

What did Smith plead guilty to?

One count of conspiracy to commit wire fraud in violation of 18 U.S.C. § 371, charged by information after he waived indictment, entered by guilty plea before the court on August 4, 2021 under a written plea agreement.

How much was obtained?

$1,134,782 in PPP funds, from a $426,717 loan for Throwbackjerseys.com wired on or about May 20, 2020 and a $708,065 loan for Blue Star Records. The government's memorandum states he paid kickbacks of approximately $250,000 to two co-conspirators who prepared and submitted the applications.

What did the applications claim?

For Throwbackjerseys.com, 21 employees and an average monthly payroll of $170,687, supported by forged documents including a purported bank statement and IRS Forms 941 for 2019. For Blue Star Records, an average monthly payroll of $283,226, with the application concealing Smith's ownership by listing a family member as sole owner.