Jeffrey Bearden, False Statements and Bank Fraud, Maryland 2020

COVID-19 Relief Fraud Lands Hagerstown Man in Hot Water

A federal criminal complaint has been filed against Jeffrey Bearden, a 47-year-old resident of Hagerstown, Maryland, charging him with false statements and bank fraud. The allegations stem from Bearden’s application for a loan through the Paycheck Protection Program (PPP) in May 2020.

According to the affidavit filed in support of the criminal complaint, Bearden electronically signed falsified documents attesting to inaccurate statements in order to receive $734,609 from the PPP for use in paying business costs, primarily employee salaries. However, the company, B&D Consulting, had no employees and reported zero earnings and wages for any employee to the Maryland Department of Labor and Licensing (DLLR) in 2020.

On May 18, 2020, the funds were approved and deposited into Bearden’s bank account. The same day, the $734,609 was transferred to a different bank account. The next month, $600,000 was transferred to Bearden’s brokerage account, which was used to purchase stocks in various publicly-traded companies, including one that produced a COVID-19 vaccine. This purchase is not an approved use of PPP loan funds by the Small Business Administration.

In February 2021, Bearden applied for a second PPP loan of a similar amount, attaching a fraudulent bank statement for a B&D Consulting account for the month of March 2020, showing the company was paying salaries to at least 19 individuals. Records show that no deposits or withdrawals had been made from that account in March 2020, and the account balance was in the negative.

Bearden faces a maximum sentence of 30 years in federal prison for each of these charges if convicted. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. At his initial appearance in U.S. District Court in Baltimore, U.S. Magistrate Judge Beth P. Gesner ordered that Bearden be released pending his trial.

It’s essential to note that a criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.

The investigation was led by Homeland Security Investigations (HSI) Baltimore and the U.S. Small Business Administration Office of Inspector General (SBA OIG). Assistant U.S. Attorney Aaron S.J. Zelinsky is prosecuting the federal case.

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