Love & Hip Hop In May of 2020,
38-year-old Love and Hip Hop star Maurice 'Moe' Fayne pleaded guilty to several different types
of financial crimes. It did not take him and his attorneys long to negotiate Fayne's sentencing.
Moe Fayne was sentenced to 17 years in prison for conspiracy, wire fraud, bank fraud,
making false statements to get a business loan through the PPP system. But who did he defraud?
How did he do it, and what does all this illegal financial activity have to do with Covid?
Mo Fayne Background Before we discuss Mo Fayne's schemes,
we need to learn more about the star himself. Love and Hip Hop is
a reality tv show detailing the daily lives of hip hop stars, their significant others,
and all the drama that ensues from their often chaotic musical lifestyles.
Mo Frayne, also known as Arkansas Mo, was a member of the Love and Hip Hop: Atlanta cast
for a short time as the love interest to longtime star Karlie Redd. Nevertheless, it was long enough
to establish his celebrity status. After leaving the show, Fayne--who had already achieved a decent
level of fame among the viewers of Love and Hip Hop--decided to leverage his notoriety
to start a company. This type of career move is a common brand-building strategy for reality stars,
like the Kardashians, who sell several different types of clothing lines and makeup products to
their adoring fans year in and year out, bringing in billions in sales revenue.
However, instead of selling clothes, Fayne announced to investors that he would start
a trucking business called Flame Trucking. And that's where things all went wrong.
Trucking “Business” Fayne eventually got 20
investors to pour millions of dollars into his trucking business in return for a stake in the
company. By the nature of investing, they expected to be paid back in future profits.
But once Fayne received the capital, he went on a spending spree. On one trip to a casino
in Oklahoma, Fayne blew over $5 million. He spent the rest funding his lavish lifestyle,
giving the impression that the reality TV star was still living the high life. Perhaps he wanted to
prove he could make it as an entrepreneur and wasn't just riding the coattails of reality TV.
Ironically, Fayne also used his investor's money to pay off personal debts, while almost no money
went into funding his trucking business. With all of his investors' money tied up in casinos and
other luxuries, the Ponzi schemer needed to find a way to pay them back.
Covid Fayne kept his scam
running from 2013 to 2020. During that time, he used new investor money to pay off old investors,
the good ol’ textbook Ponzi scheme. However, as like all Ponzi schemes, the well ran dry,
and the walls closed in on Fayne and his scams. Fayne needed more money,
and the Covid-19 Pandemic made that even harder… or did it?
With the Pandemic shutting everything down,
Fayne had no way of making any money, especially with his trucking business,
which had to shut down due to Covid restrictions. At least he couldn't go to the casino anymore, so
we guess that helped in a round-about way. Then, on April 3rd, 2020, the United States
government created the PPP loan program. For Fayne, the PPP loan was his way out.
PPP Loans Acting U.S. Attorney Kurt R. Erskine
had this to say, quote, "Fayne planned to use the PPP program as a cover for his long-running
Ponzi scheme. The funds the program supplies serve as a lifeline to many businesses trying
to stay afloat during the pandemic. Unfortunately, his fraud helped deplete those precious dollars."
The Pandemic put many Americans in a tough spot financially. Many working people lost their jobs;
business owners lost their income stream and built up significant amounts of debt
in the process. To help those affected by the shutdown and economic turmoil,
the government offered aid to businesses so they could pay their employees and
expenses. This aid has come through PPP loans, which stand for Paycheck Protection Program.
To get a PPP loan, all you would need to do is verify the needs of your business through
legal documents that detail the numbers on your payroll. If you can prove that you lack the funds
to pay your employees, the government will issue you a forgivable loan. If you use the money to
pay your employees and businesses expenses only, then you don't have to pay it back. While the PPP
loans kept small businesses afloat, they opened the doors to scammers and con-artists alike.
The amount of money you received was based on your monthly payroll expenses.
The more employees you have, the more you spend on payroll. The more you spend on payroll,
the bigger your PPP check is from the government.
Fayne saw an opportunity to use his trucking business to steal more money from our financial
system. He claimed to have 107 employees, who all commanded a monthly payroll of $1,490,200. These
claims, of course, were not even remotely true. Some quick math tells us that his 107 employees,
on average, were making almost $14,000 per month.
The application was asking for enough relief money to help pay Fayne's business expenses, or,
as the U.S attorney's office explains: "retain workers and maintain payroll or make mortgage
interest payments, lease payments, and utility payments related to his trucking business," Which
Fayne believed $3.7 million would be enough to cover his "business expenses. He submitted an
application for that amount using the near $1.5 million payroll expenses as proof.
Though the claims were false, they were still convincing enough to give Fayne the
multi-million dollar loan. Though they denied him his initial request of $3.7 million,
the SBA ended up giving Fayne a little over $2 million for his 107 employees.
Spending Habits Now that Fayne finally had some money,
he could fix the damage he caused with his Ponzi scheme by paying back the investors he stole from.
True to his character, Fayne did the opposite. When the time came,
Fayne spent the money on items that would increase his status.
Fayne went on another shopping spree when the PPP money landed in his bank
account. He started out by leasing a Rolls-Royce Wraith for $136,000, which
is a lot when you consider it's a lease. Fayne, of course, didn't just lease fancy
items; he bought some too. Including $85,000 worth of custom-made jewelry.
Among the custom-made jewelry, Fayne bought a Rolex Presidential watch, a diamond bracelet,
and a 5.73-carat diamond ring. However, not all of Fayne's
PPP loan went towards diamonds and Rolls-Royces. He also took out $65,000
in cold hard cash. Authorities reportedly found an additional $85,000 in Fayne's house
after his arrest. He also seems to have used the funds to start another business to go
with Flame Trucking, which was more like "Barely Sparking Trucking" at this point in the Pandemic.
In a hilariously responsible move, Fayne did spend $230,000 of the 2 million dollar PPP
loan to keep his Ponzi scheme going. But he did that just to get people off his back.
In addition to the $230,000, Fayne spent an even smaller fraction, roughly $50 grand,
to finally pay off restitution in a fraud case from way back. He even paid off some of his debts,
including $40,000 thousand dollars in past-due child support money he owed.
But despite some of the money going towards repaying victims of his scheme,
the $200,000 thousand dollars plus wasn’t enough to cover up the millions he owed to investors.
Eventually, the FBI started investigating Fayne's, finally discovering the obvious
irregularities in his financial activities after he obtained the PPP loan in the Spring of 2020.
A year later, in the Spring of 2021, Fayne was charged and sentenced to 17 years on all
counts. Chris Hacker, an FBI special agent in Atlanta, said Fayne was used as an example of
what will happen to anyone who steals from emergency relief programs. Fayne didn't just
steal from the taxpayer's pockets; he stole from struggling business owners who were more deserving
of that money. You know, owners that weren't reality TV stars running illegal Ponzi schemes.
Pandemic Helped? It's plausible that Fayne would not
have been able to raise more money and continue his Ponzi scheme without the Pandemic. Covid or
no covid, Fayne was on the verge of getting busted for his scams. The Pandemic was
only speeding up the inevitable, and his trucking business would soon be exposed for what it was:
an unsuccessful venture that never made enough money to pay back its principal investors.
Covid drove the final nails in Fayne's coffin. It was here that he could have come clean,
confessed his sins, and hoped his reality TV status would be enough
to get him off the hook. Instead, he chose to rob the federal government.
However, Fayne's scheme could have potentially gone on for a bit longer,
but not much longer than a year. Fayne was already backed up against the fence with debt;
other fraud cases and a serious lack of funds surrounded him in the metaphorical alley.
There is also reason to speculate that Fayne's sentence of 17 years would
not be nearly as long if not for the fact that he used Covid relief money
to buy diamonds and lease British luxury cars.
Although Fayne's scheme was unique in that it involved one of the strangest and
most impactful events of the 21st century, the overall characteristics of his scheme
are not that unique when compared to contemporary Ponzi schemers.
A recent scheme conducted by the now infamous
Ian Bick was featured in a documentary series on Hulu. The episode tells how Bick stole over
$500,000 from investors who wanted a stake in the teenager's growing nightclub business.
Compared to Fayne's scheme, it’s a junior Ponzi scheme. But Bick's scheme does show
a similarity in motive. Bick, in stark contrast to Fayne, has been very open to
discussing his nightclub scheme. In one of the many interviews he has done, Bick admitted that:
"In my mind … I was the next young millionaire entrepreneur,
so I started spending it as if I already had it,"
Motivation Making sure that your
friends and fans know you're wealthy is a big part of some reality stars' entertainment value. Soon,
after so many episodes, movies, or songs, it becomes a part of your identity. For Fayne,
being a part of the hip-hop culture, the reality tv industry, and the American capitalist system
was plenty enough to push him to find "creative" ways to achieve status in our society.
And more than anything else, the reality TV industry seems to force people to get creative
more than most lines of work. For years, reality TV has been attacked with
accusations of being fake, staged, scripted, and overproduced, including Love and Hip Hop.
To give these accusations some merit, some reality shows have even won best
script awards, and stars have admitted under oath that their shows were staged.
With its inherent reliance on fakeness, reality TV seems to cause its stars to do
whatever it takes to maintain their image. Whether that image is
that of a young millionaire or a hip-hop star you want to flaunt, it can be
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