As The Source previously reported, Diamond “Baby Blue” Smith was involved in a $24 million COVID-19 relief scheme, which led to his arrest on charges of wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud. Now, Smith has made his very first court appearance and entered a not guilty plea.

The 36-year-old Smith was hit with a new charge by federal prosecutors on January 6th, conspiracy to commit fraud charge, which they anticipate will assist them in seizing his 2010 Ferrari 458 Italia along with other expensive ill-gotten gains.

The new evidence the feds have against Smith stems from a document that accuses Smith of submitting false PPP loan applications for two businesses and added that Smith allegedly submitted a $96,000 payment to get the black Ferrari, listing it as a company vehicle for his Blue Star Records imprint.

Smith faces up to five years in prison if convicted on the federal conspiracy charge.