Reality TV star Maurice Fayne, famous for his appearance in VH1's "Love & Hip Hop: Atlanta," has been arrested and charged with federal bank fraud after misusing funds from a Paycheck Protection Program (PPP) loan meant for coronavirus relief.
As per the criminal complaint, Fayne, who is also known as "Arkansas Mo," runs a corporation called Flame Trucking. He submitted a PPP loan application for the company on April 15 this year while stating that the business had 107 employees and an average monthly payroll of $1,490,200.
He asked for a loan of $3,725,500 which Fayne claimed to "retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule."
The Reality TV star into fraud
After United Community Bank funded the loan for $2,045,800 in late April, Fayne, who is in his 30s', used around $1.5 million of the funds to buy $85,000 worth jewellery, including a Rolex watch, a diamond bracelet and a 5.73-carat diamond ring for himself, said US Attorney's Office for the Northern District of Georgia. The statement also added that he leased a 2019 Rolls-Royce Wraith and paid $40,000 for child support.
Chris Hacker, Special Agent in Charge of FBI Atlanta said during this crisis period in the U.S. when small businesses are struggling for survival, "We cannot tolerate anyone driven by personal greed, who misdirects federal emergency assistance earmarked for keeping businesses afloat."
An attorney for Fayne, Tanya Miller stated that there has been "considerable confusion" among small business owners about the PPP guidelines, especially around the queries of whether and how they are permitted to pay themselves a salary or take an owner's draw. The attorney also mentioned, "I hope these issues to be better fleshed out in the weeks and months to come," and an appropriate response will be provided in the proper forum "once all the information has been provided to us."
The PPP loan program
It should be noted that through this program federal government aims to help small businesses and the employees to survive during the Coronavirus crisis which has caused the loss of over 20 million jobs during the self-imposed shutdown to fight the pandemic. Considering the economic fall in the U.S., the federal authority decided to sanction these loans for businesses with 500 or fewer employees to pay employees' salaries, rent and utility costs.
As per the court document, Fayne claimed to have used the bank loan to "pay payroll and other business expenses" of his company and denied that he used any of the PPP loan proceeds to pay his personal debts.
After the Federal agents searched the Fayne's residence in Dacula, Georgia, on May 11 they found about $80,000 in cash, including $9,400 that the "Love & Hip Hop" star had in his pockets. Later, the accused accepted that he used the loan to buy accessories and when he was asked whether he had used the loan on his Rolls- Royce, Fayne replied, "Kinda, sorta, not really."
He told the Federal agents that he thought he had the right to use part of the PPP loan proceeds for "other business purposes" and for "working capital." However, he was released on a $10,000 bond Wednesday, May 13.
