Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Chad Arrington a/k/a “Chad Focus”, age 33, of Randallstown, Maryland to 30 months in federal prison, followed by 12 months of home confinement as part of three years of supervised release, for a federal wire fraud conspiracy in connection with a scheme to use a company credit card to make more than $4.1 million in unauthorized purchases. Judge Bennett also ordered Arrington to pay restitution in the full amount of the victim’s losses, totaling $4,142,435.31.
The sentence was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner and Acting Special Agent in Charge Rachel Byrd of the Federal Bureau of Investigation, Baltimore Field Office.
“Chad Arrington illegally used a company credit card to spend more than $4 million to promote himself as a hip-hop artist and to promote his company,” said Acting U.S. Attorney Jonathan F. Lenzner. “Now Arrington will spend more than two years in federal prison. The United States Attorney’s Office for the District of Maryland will continue to utilize our resources to prosecute this type of costly fraud.”
According to his plea agreement, Arrington was employed by Company 1 as a Search Engine Optimization (“SEO”) Specialist from approximately 2011 to August 2018. As an SEO Specialist, Arrington was responsible for promoting and marketing Company 1’s products and services online. Company 1 assigned Arrington an American Express company credit card (the “credit card”) to be used for business expenses, exclusively.
From at least January 2015 through August 2018, Arrington, and four co-conspirators used the credit card for fraudulent purchases, including to promote his hip-hop artist alter-ego, Chad Focus, and Focus Music Entertainment, as well as to make unauthorized purchases that benefitted them each personally.
Arrington admitted that he used the credit card to purchase sound equipment, studio kits, instruments, and music technology, which he then used to create an artist alter-ego “Chad Focus,” and produce a number of hip-hop songs through the company he formed, Focus Music Entertainment LLC. Arrington then used the credit card to make additional unauthorized purchases including promotional services to increase online streaming of his songs, purchase “likes,” “followers,” “tags,” and “views” across social media and viewing platforms; to purchase services from a company that promoted mixtape videos and singles, his image, and music; and to make unauthorized payments to multiple billboard companies to display images of Arrington and his website throughout the United States and to promote Chad Focus and Focus Music Entertainment LLC. Arrington also charged the credit card over $300,000 for unauthorized international and national travel expenses, hotels, airfares, night life and other miscellaneous expenses for himself and for Co-Conspirators 1 and 2. Additionally, Arrington made over $375,000 in unauthorized purchases for Chad Focus merchandise, accessories, and purchases related to a bike-sharing business. Between May 2018 and August 2018, Arrington used the credit card to pay multiple billboard companies to create billboards for Chad Focus and Focus Music Entertainment LLC. For example, a billboard displayed the image of Arrington surrounded by stacks of cash and the words “Get to the money.” Another billboard depicted Arrington with the words “Chad Focus. I will teach you how to be rich.”
According to the plea agreement, Arrington used the credit card to make over $1.5 million in unauthorized purchases from entities and accounts controlled by Co-Conspirator 2 and Co-Conspirator 3. In turn, the co-conspirators kicked back hundreds of thousands of dollars to Arrington by funneling cash payments to Arrington and to accounts controlled by Arrington.
In order to conceal the scheme, Arrington asked Co-Conspirator 1 and Co-Conspirator 4 to use computer software to make false entries on the credit card billing statements in order to conceal the recipient of the payments from Arrington’s supervisor and Company 1. Additionally, Arrington forged the signature of his supervisor on his credit card billing statements to make it appear as though he had received approval for certain purchases when, in fact, he had not. Arrington then sent those false payment authorizations to other employees who relied on the authorizations to ultimately pay off the outstanding balance of the credit card.
Acting United States Attorney Jonathan F. Lenzner commended the FBI for its work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys Mary W. Setzer and Matthew Phelps, who prosecuted the case.
