Ryan Keith Bailey, COVID-19 Relief Fraud, West Virginia 2023

BECKLEY, W.Va. – A Raleigh County man has been sentenced to prison for his role in a COVID-19 relief fraud scheme.

Ryan Keith Bailey, 47, of Beaver, was sentenced to one year and two months in prison, to be followed by three years of supervised release, and ordered to pay $2,134,900 in restitution for 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 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 mortgage interest, lease, and utility costs. Bailey’s PPP loan application was approved and $166,517.40 was deposited into the RKB Inc. business checking account on May 1, 2020.

Between May 1 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. As part of his guilty plea, Bailey admitted that his certification was false and that only $6,517.00 of the PPP loan proceeds were spent for RKB Inc.’s legitimate business expenses.

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

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 paid $192,000 of the court-ordered restitution in advance of today’s sentencing. The United States has also frozen assets of Bailey totaling $1,348,249.81.

Source: https://www.justice.gov/usao-sdwv/pr/raleigh-county-man-sentenced-prison-covid-19-relief-fraud-scheme