By Staff Reporter |
Phoenix resident Jamar Johnson, 54, was sentenced to 15 months in prison for the theft of more than $1 million in COVID-19 pandemic loans.
Johnson admitted to submitting false applications to obtain Paycheck Protection Program (PPP) loans, according to a press release issued on Wednesday by the Arizona District Attorney’s Office.
Johnson claimed to run a multimillion-dollar business called CBL Worldwide II, a recreational basketball league which he purported had 73 employees and more than $4.9 million in annual payroll expenses.
Federal prosecutors said the fraudulent business had zero employees and zero payroll expenses.
Johnson reportedly used the $1 million in PPP loans for personal gain through purchases of cryptocurrency, a vehicle, and cosmetic dentistry. Johnson also transferred the ill-gotten funds to foreign markets in an effort to conceal them.
According to court records, Johnson applied for relief in late April 2020, three weeks after the PPP launched, in which he initially claimed that he had five employees and paid $144,000 in annual payroll the year prior. Johnson received $30,000 from that first loan application in May 2020.
Then, Johnson applied for a second loan in late March 2021 in which he claimed to have 73 employees and more than $4.8 million in annual payroll expenses for his amateur basketball league. Johnson received more than $977,000 for the second loan.
Court records also revealed that Johnson lost a large portion of funds invested in cryptocurrency: at least $839,000.
Johnson also received PPP loan forgiveness, which required him to falsely attest that he had spent at least 60% of the loan proceeds on actual payroll costs. He submitted false tax records to back up his claims.
Federal prosecutors requested in their sentencing memorandum filed last week that Johnson be sentenced to 18 months in prison followed by three years of supervised release.
“Defendant lied outright to obtain the funds, which he then used to pay for personal expenses and failed investments,” stated the memorandum. “This offense involved greed, repeated lies, and Defendant taking advantage of a national emergency for his own personal benefit.”
Arizona District Court Judge Sharad Desai — a 2024 Biden appointee and brother to Roopali Desai, a 9th Circuit Court of Appeals judge also appointed by Biden — sentenced Johnson to 15 months in prison and three years of supervised release.
Johnson will also be required to pay full restitution to the Small Business Administration.
Versions of Johnson’s CBL venture extend back over 20 years under various names like “CBL City Rec” or “CBL Basketball.” These versions of the CBL venture would promise varying payouts to recreational players who obtained memberships through his league.
According to a 2019 profile on Johnson by VoyagePhoenix, CBL Worldwide II was a recreational basketball league platform for adult players that offered monthly player membership fees as opposed to the traditional team fee format.
Prior to the pandemic loan fraud, Johnson promised wins up to $20,000 per year. Johnson directed applicants to download his CBL League App to subscribe to the league.
Then, around late 2021 and through 2022, Johnson began advertising $1.6 million in cash prizes. He reintroduced his venture as “CBLHoopCity.”
The league purportedly offered several team levels with “a tax-deductible membership fee,” ranging from $2,500 to $10,000. Johnson promised that national tournament cash prizes would range from $100,000 to $1 million.
Johnson’s final post on his CBLHoopCity Instagram page was a video in 2024 cautioning against scammers.
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