Three of hip-hop music’s wealthiest moguls are coming under scrutiny for receiving Payment Protection Plan loan forgiveness, causing many critics to question how the program has truly supported small businesses.
Sean Combs, Kanye West and Jay-Z all received PPP loans during the pandemic.
In March 2020, Congress passed the CARES Act, allotting $669 billion to the PPP, a loan developed specifically to support small business owners in covering their payroll costs. In addition to providing funding to small businesses, PPP made for recipients to receive full loan forgiveness if at least 60 percent of their funding was used to cover payroll costs. This stipulation was created to prevent layoffs as unemployment rates reached historic highs during the pandemic. The PPP, which was awarded in two increments, cost taxpayers an estimated $593 million.
Yet celebrities’ access to PPP loans and loan forgiveness is causing many critics to question how the program truly has supported small businesses.
“It just goes to show you that there are winners and losers,” Carol Roth, author of The War on Small Business, told News Nation. “The wealthy and the well-connected are taken care of at the expense of those who are not.”
Music Moguls Who Received PPP Loans
West, Jay-Z and Combs are the highest earners within the hip-hop industry, according to Forbes 2022 list. Here’s a breakdown of their wealth and respective business’ ability to participate in PPP:
West’s Yeezy, LLC borrowed $2.3 million through the program. An estimated $1.7 million was spent on payroll for 106 members of Yeezy’s staff. West currently tops the Forbes list for highest-paid hip-hop artists at $1.9 billion. The loan status is currently listed as ongoing; it has not been fully repaid or forgiven.
Jay-Z, whose net worth is $1.4 billion, is connected with two businesses approved for PPP loans. Malibu Entertainment is associated with his streaming platform, Tidal. The company received $2.1 million to cover payroll for 95 employees. Jay-Z’s champagne, Armand DeBrignac Holdings, borrowed $293,000 reportedly for the purpose of covering payroll expenses. Both companies received loan forgiveness.
Finally, Combs’ cable network Revolt Media and TV LLC received first and second draw PPP loans. The first loan was awarded in April 2020, for $1.9 million to cover payroll of 134 jobs. The second loan was taken in March 2021, for $1.3 million and covered payroll expenses associated with 84 jobs.
Both loans were forgiven.
PPP Celebrity Scams
In addition to wealthy celebrities receiving PPP loan forgiveness, others have also been caught in scams — landing them in hot water. A report published by the University of Texas at Austin estimates that $76 billion of PPP funds were awarded to fraudulent business owners.
In September 2021, hip-hop artist and former “Love & Hip Hop” cast member Mo Fayne was sentenced to 17.5 years in prison for charges related to operating a Ponzi scheme and stealing more than $2 million in PPP funds. He must also repay a $4.4 million restitution bill.
Former NFL player Josh Bellamy was arrested for participating in a PPP fraud scheme with others who applied for more than $24 million in loans. In December 2021, Bellamy was sentenced to three years and one month for fraudulently receiving $1.2 million in PPP funds.