Fredericksburg Family Sentenced for Pandemic Unemployment Insurance Fraud, Mail Theft, and Bank Fraud Schemes
ALEXANDRIA, Va. – A Manassas man and a Bealeton man were sentenced today to a combined 6 years in prison for engaging in a joint scheme to defraud banks and the Small Business Administration of over $7 million in COVID relief funds.
According to court documents, from approximately April 2020 to March 2021, Bennie Earl Magee, 55, falsified payroll records, created fake IRS business tax returns, and submitted to lenders and the SBA falsified revenue reports of multiple companies to obtain over $7 million in PPP and EIDL loans for himself and others. Michael Gilcher, 46, obtained $1.4 million of the total, but wrote checks back to Magee’s company, Bull Run Capital, totaling approximately $620,000. Magee also involved another individual in the scheme and proposed the fraud to yet others. Magee used over $5 million of the PPP fraud proceeds to invest in crypto currency, to purchase vehicles, and to pay other personal and business expenses.
“PPP and EIDL loans were created to assist those financially effected by the COVID-19 pandemic. Mr. Magee and Mr. Glicher not only lied to the IRS and stole millions of taxpayer funds, but frivolously spent it on items such as vehicles and cryptocurrency,” said Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia. “EDVA will continue to work with the SIGPR and other law enforcement partners to prosecute those who take advantage of all of us.”
Magee was sentenced to 5 years and Gilcher was sentenced to 1 year in prison for their roles in the conspiracy.
“This prosecution and investigation resulted in the sentencing of two individuals responsible for defrauding the taxpayers of millions of dollars by abusing federal programs designed to bring relief to struggling small businesses that were hit hard by the pandemic,” said Brian Miller, the Special Inspector General for Pandemic Recovery. “SIGPR is glad to have played a significant role teaming with the FBI and the United States Attorney’s Office to hold these individuals accountable.”
"At a time when many small businesses were trying to keep their doors open and support their employees, these fraudsters chose to lie and steal from small business relief programs to line their own pockets," said Inspector General Michael E. Horowitz, Chair of the PRAC. "Today's sentencing demonstrates the commitment of the Inspector General community and federal prosecutors to bring to justice those who brazenly stole money from taxpayers. We appreciate the partnership with the investigating agents, the FBI, and U.S. Attorney Aber to protect COVID-19 relief funds for the public."
“Today’s sentencings are an example of the continued commitment of the FBI to identify and hold to account those who engaged in COVID relief fraud,” said Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal and Cyber Division. “Magee and Glicher engaged in a joint scheme to defraud banks and the Small Business Administration of over $7 million in COVID relief funds. Even years after COVID relief funds were distributed, the FBI and our partners continue to investigate these schemes which defrauded the government and stole from taxpayers.”
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Brian Miller, Special Inspector General for Pandemic Recovery (SIGPR); and Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal Division; made the announcement after sentencing by Senior U.S. District Judge Claude M. Hilton.
This case was investigated by a SIGPR agent assigned to the Pandemic Response Accountability Committee (PRAC) Fraud Task Force. The PRAC was established to serve the American public by promoting transparency and facilitating coordinated oversight of the federal government’s COVID-19 pandemic response. The PRAC’s 21 member Inspectors General identify major risks that cross program and agency boundaries to detect fraud, waste, abuse, and mismanagement in the more than $5 trillion in COVID-19 spending. The PRAC Fraud Task Force brings together agents from 16 Inspectors General to investigate fraud involving a variety of programs, including the Paycheck Protection Program. Task force agents who are detailed to the PRAC receive expanded authority to investigate pandemic fraud as well as tools and training to support their investigations.
Assistant U.S. Attorneys Russell L. Carlberg and Kathleen Robeson prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case Nos. 1:23-cr-86 and 1:23-cr-91.