Raleigh County Man Pleads Guilty to COVID-19 Relief Fraud Scheme

BECKLEY, W.Va. – Ryan Keith Bailey, 47, of Beaver, pleaded guilty today to theft of government money. Bailey obtained $2,166,517.40 in loans through the Coronavirus Aid, Relief, and Economic Security (CARES) Act for his business and instead converted nearly all of the proceeds for his personal use.

According to court documents and statements made in court, on April 20, 2020, Bailey applied for a $166,517.40 Paycheck Protection Program (PPP) loan available under the CARES Act on behalf of his business, RKB Inc. Guaranteed by the Small Business Administration (SBA), PPP loans were a source of emergency financial assistance provided by the CARES Act to Americans suffering the economic effects of the COVID-19 pandemic. Bailey certified that he would use the PPP loan proceeds only for permissible expenses, specifically to maintain payroll and cover lease, mortgage interest and utility costs. Bailey’s PPP loan application was approved and the $166,517.40 was deposited in the business checking account for RKB Inc. on May 1, 2020.

On November 30, 2020, Bailey certified that the PPP loan proceeds were used only on permissible expenses when he applied to have RKB Inc.’s loan forgiven. Loan forgiveness was allowed under the PPP program when proceeds went solely to eligible purposes. The SBA ultimately forgave $157,456.50 of the $166,517.40 PPP loan for RKB Inc.

As part of his guilty plea, Bailey admitted that his certifications were false and that only $6,517 of the PPP loan proceeds were spent for RKB Inc.’s legitimate business expenses. Between April 2020 and May 19, 2020, Bailey transferred $160,000 of the PP loan proceeds to his personal bank accounts and a personal brokerage account, using those proceeds for his personal benefit.

Bailey also admitted to relevant criminal conduct as part of his guilty plea. Bailey obtained an Economic Injury Disaster Loan (EIDL) for RKB Inc. from the SBA on January 6, 2021, and later successfully applied several times to increase its amount from $150,000 to the maximum allowable amount of $2,000,000. The CARES Act authorized the SBA to provide EIDL program loans of up to $2 million to eligible small businesses experiencing substantial financial disruption because of the COVID-19 pandemic. Bailey admitted that he transferred over $1,974,900 of the EIDL proceeds to his personal bank accounts, his personal brokerage account and a cryptocurrency exchange platform for his own personal benefit.

Bailey is scheduled to be sentenced on September 12, 2025, and faces a maximum penalty of 10 years in prison, up to three years of supervised release, and a $250,000 fine. Bailey also owes at least $2,219,163.97 in restitution, with a final amount to be determined by the Court.

Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative work of 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 an active member of the Pandemic Response Accountability Committee (PRAC) Fraud Task Force. The PRAC was established to promote transparency and facilitate coordinated oversight of the federal government’s COVID-19 pandemic response. The PRAC’s 20 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, including spending via the Paycheck Protection Program (PPP), and Economic Injury Disaster Loan (EIDL) program. This case was also supported by the PRAC’s Pandemic Analytics Center of Excellence, which applies the latest advances in analytic and forensic technologies to help OIGs and law enforcement pursue data-driven pandemic relief fraud investigations.

United States Magistrate Judge Omar J. Aboulhosn presided over the hearing. Assistant United States Attorney Erik S. Goes is prosecuting the case.

The United States filed a parallel civil action against Bailey and RKB Inc. and a civil complaint for forfeiture. The lawsuit seeks damages and civil penalties, alleging violations of the False Claims Act and Financial Institutions Reform, Recovery and Enforcement Act and unjust enrichment based upon Bailey’s receipt of the PPP and EIDL proceeds. The forfeiture action targets $1,348,249.81 in Bailey’s bank and brokerage accounts. Both cases are pending in U.S. District Court for the Southern District of West Virginia.

Individuals with information about allegations of fraud involving COVID-19 are encouraged to report it by calling the Department of Justice’s National Center for Disaster Fraud 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 Nos. 5:24-cr-106 (criminal), 5:24-cv-456 (civil) and 5:23-cv-406 (forfeiture).

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