Beckley Man Pleads Guilty to COVID-19 Relief Fraud

BECKLEY, W.Va. – Mark William Bailey, 50, of Beckley, pleaded guilty today to theft of government monies, admitting he stole approximately $451,237.51 in COVID-19 relief loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to court documents and statements made in court, on July 10, 2020, Bailey was the sole owner and president of RMR Delivery Service Inc. when he obtained an Economic Injury Disaster Loan (EIDL) for $150,000. The EIDL program was created by the CARES Act for eligible small businesses experiencing substantial financial disruptions due to the COVID-19 pandemic. EIDL proceeds can only be used on certain permissible business expenses, which can include payment of fixed business debts, payroll, accounts payable, and other business-related expenses that could have been paid had the COVID-19 disaster not occurred.

Bailey sought two modifications of his EIDL, increasing the loan amount first to $500,000 and then to $2 million. To obtain each modification, Bailey certified that RMR Delivery Service Inc. would use all loan proceeds solely as working capital to alleviate economic injury caused by the pandemic. Bailey admitted that he fraudulently used approximately $403,768.04 of the EIDL proceeds for his own personal benefit from about March 1, 2022 through about October 20, 2022. Among other personal uses, Bailey purchased a garage and a personal vehicle with the EIDL proceeds. 

In or around April 2020, Bailey also applied for and received a $110,032 loan through the Paycheck Protection Program (PPP). Also created by the CARES Act for qualifying small businesses, PPP loans were for job retention and certain other business expenses. Bailey admitted that he misappropriated $47,469.47 of the PPP loan to pay his personal mortgage on or about June 4, 2020.

Bailey is scheduled to be sentenced on January 12, 2024, and faces a maximum penalty of 10 years in prison, three years of supervised release, and a $250,000 fine. Bailey also owes $451,237.51 in restitution.

“The CARES Act offered an emergency lifeline amid a devastating pandemic, and Mr. Bailey saw this as an opportunity to enrich himself at the expense of taxpayers,” said United States Attorney Will Thompson. “I commend the thorough, collaborative and all-hands-on-deck approach by the National Aeronautics and Space Administration Office of Inspector General (NASA OIG), the United States Secret Service, the West Virginia State Police-Bureau of Criminal Investigations (BCI) and the West Virginia State Auditor’s Office (WVSAO) Public Integrity and Fraud Unit (PIFU).”

“NASA OIG is committed to investigating and holding accountable those who improperly obtain and use government loans,” said Special Agent in Charge Adelle Harris of the NASA Office of Inspector General’s Eastern Field Office. “I am proud of the exceptional teamwork of our federal and state law enforcement partners, the Pandemic Response Accountability Committee Fraud Task Force, and the USAO for the Southern District of West Virginia which resulted in today’s guilty plea.”

“We are committed in our office to protecting taxpayer dollars and holding those accountable who commit fraud,” said West Virginia State Auditor J.B. McCuskey. “The pandemic was challenging for everyone, especially our small businesses, and these loans were to help businesses survive, but unfortunately, we know that some took advantage of the billions of dollars flowing out of Washington. I would like to commend the investigative work by this task force, including our specialized accountants, who are cracking down on this abuse and returning taxpayer dollars to the people.”

United States District Judge Frank W. Volk presided over the hearing. Assistant United States Attorney Erik S. Goes is prosecuting the case.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who suffered the economic effects caused by the COVID-19 pandemic. On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:23-cr-131. 

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