West Virginia Business Owner Sentenced for COVID Relief Fund Fraud
It appears there is a new name on the list of COVID relief fraudsters—Mark William Bailey, a business owner who evidently couldn’t resist misusing taxpayer-funded pandemic relief for personal luxuries, according to the DOJ this week. After misappropriating approximately $451,237.51 in COVID-19 relief funds guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, through his company RMR Delivery Service Inc., Bailey now finds himself under federal probation for five years, with a year on home detention. In addition, he’s had to pay full restitution and a hefty civil penalty, totaling $902,475.49.
So, what exactly did Bailey do with these funds meant to help small businesses survive? According to court documents, Bailey managed to secure an Economic Injury Disaster Loan (EIDL) for $150,000 initially. Not satisfied, he sought two increases, eventually pushing the loan amount to a staggering $2 million. This was all done under the CARES Act—a pandemic-relief law passed to aid real businesses in real financial straits. However, Bailey reportedly spent around $403,768.04 on personal expenses, splurging on a new garage and vehicle, instead of business essentials.
Not stopping there, Bailey also managed to pocket $110,032 through a Paycheck Protection Program (PPP) loan. With PPP funds designated strictly for payroll and job retention, that should have gone toward his employees. But in true fraudster fashion, Bailey rerouted $47,469.47 of this PPP loan to pay off his personal mortgage.
NASA and Secret Service Investigate
The wheels of justice turned quickly, thanks to a coalition of agencies including NASA’s Office of Inspector General, the U.S. Secret Service, and West Virginia’s Bureau of Criminal Investigations. Their investigation revealed a pattern of fraudulent activity that, according to U.S. Attorney Will Thompson, “sends a message” to others looking to siphon pandemic relief funds. And that message? Pandemic relief fraud isn’t a “get-rich-quick” scheme without consequences.
Bailey’s fate was sealed by Chief U.S. District Judge Frank W. Volk, who imposed the sentence. And with $5 trillion in relief distributed across programs like EIDL and PPP, Bailey’s case is just one of many COVID relief fraud cases now under close government scrutiny.
CARES Act and COVID-19 Fraud Enforcement
The CARES Act, enacted in March 2020, rolled out financial lifelines for Americans impacted by the pandemic, with programs like the PPP and EIDL providing immediate financial relief to small businesses. But with relief funds came fraudsters, and in May 2021, the Attorney General established a COVID-19 Fraud Enforcement Task Force to address exactly these abuses. Through coordinated oversight, task force officials continue to investigate and prosecute pandemic relief fraud, working to recover funds for programs genuinely in need.
As with Bailey, one thing is clear: when it comes to COVID relief funds, fraudulent spending won’t go unnoticed—or unpunished.
This is just one of the latest in a stream of DOJ enforcement actions involving PPP fraud this year, which remains a high priority for DOJ fraud enforcement. If you have information about COVID-19 fraud and would like to speak to a member of the Constantine Cannon whistleblower lawyer team, please contact us for a confidential consultation. Your information could be crucial to the next big settlement.