BECKLEY, W.Va. – In a significant ruling on Friday, October 25, 2024, Mark William Bailey, a 51-year-old resident of Beckley, was sentenced to five years of federal probation, which includes one year of home detention, and was mandated to pay a substantial restitution amount of $451,237.51 for his participation in the theft of government funds. Bailey confessed to wrongfully acquiring approximately $451,237.51 in COVID-19 relief loans that were guaranteed by the Small Business Administration (SBA) under the provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In an attempt to rectify his financial misconduct, Bailey has already paid back the restitution in full along with an additional civil penalty of $451,237.98 to settle allegations under the False Claims Act.
Bailey attempted two modifications of his Economic Injury Disaster Loan (EIDL), first seeking an increase to $500,000 and subsequently to $2 million. To justify each adjustment, Bailey falsely certified that RMR Delivery Service Inc. would utilize all the loan proceeds exclusively as working capital aimed at mitigating economic injuries inflicted by the pandemic. However, Bailey later admitted to misappropriating approximately $403,768.04 of the EIDL funds for personal use between March 1, 2022, and October 20, 2022, including the purchase of a garage and a personal vehicle.
Additionally, around April 2020, Bailey applied for and was granted a $110,032 loan through the Paycheck Protection Program (PPP), which was created under the CARES Act to assist qualifying small businesses in retaining jobs and covering essential business expenses. Yet, Bailey confessed to diverting a portion of this loan, specifically $47,469.47, to cover his personal mortgage on June 4, 2020.
“Mr. Bailey was required to pay not only full restitution but also an equally substantial civil penalty, which represents another tool to bring to justice those who stole COVID-19 relief funds during a national emergency,” stated United States Attorney Will Thompson, emphasizing the seriousness of the consequences faced by individuals involved in pandemic relief fraud schemes. “The outcome in this case sends a clear message to others throughout West Virginia and the United States that such unlawful conduct will not go unpunished.”
Thompson’s announcement highlighted the collaborative efforts by key investigative agencies, including 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 active as a member of the Pandemic Response Accountability Committee (PRAC) Fraud Task Force, an initiative aimed at promoting transparency and ensuring coordinated oversight of the federal government’s response to the COVID-19 pandemic. The PRAC, composed of 20 Inspectors General, works diligently to detect fraud, waste, abuse, and mismanagement within the extensive $5 trillion in government spending related to COVID-19 relief, including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. The investigative efforts in this case were further bolstered by the PRAC’s Pandemic Analytics Center of Excellence, which leverages cutting-edge analytic and forensic technologies to assist law enforcement agencies in uncovering data-driven investigations into pandemic relief fraud.
Chief United States District Judge Frank W. Volk presided over the sentencing, with Assistant United States Attorney Erik S. Goes leading the prosecution.
Anyone with information regarding allegations of attempted fraud related to COVID-19 is urged to report it by contacting the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or by utilizing the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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**Interview with United States Attorney Will Thompson on Bailey’s Sentencing**
**Interviewer:** Thank you for joining us today, Mr. Thompson. Can you provide a brief overview of the case involving Mark William Bailey and the ruling that was handed down last week?
**Will Thompson:** Absolutely, and thank you for having me. Mark William Bailey was sentenced to five years of federal probation, including a year of home detention, for his involvement in a significant fraudulent scheme to acquire COVID-19 relief funds. He wrongfully received approximately $451,237 in loans guaranteed by the SBA under the CARES Act, claiming these funds would be used for his business. Unfortunately, he misappropriated a large portion of that money for personal expenses.
**Interviewer:** It’s striking to hear that he attempted multiple modifications to increase his loan amounts. What motivated these attempts, and how did they factor into the charges against him?
**Will Thompson:** Bailey initially sought to increase his Economic Injury Disaster Loan from $500,000 to $2 million, falsely certifying that the funds would be used strictly for business purposes during the pandemic. His attempts showcased a blatant disregard for the intended use of these relief funds, and each modification exacerbated the fraudulent nature of his actions. This pattern of behavior contributed to the severity of the charges against him.
**Interviewer:** Besides the loan modifications, can you elaborate on how Bailey misused the PPP loan as well?
**Will Thompson:** Certainly. He secured a Paycheck Protection Program loan of $110,032, again with the intent of covering essential business expenses and retaining jobs. However, he confessed to diverting nearly $47,500 from this loan to pay for his personal mortgage. This further illustrates his intent to defraud the system for personal gain, rather than assisting his business, as the program was designed to do.
**Interviewer:** What message does the outcome of this case send to others contemplating similar actions?
**Will Thompson:** The sentencing sends a very clear message: fraudulent conduct related to COVID-19 relief funds will not be tolerated. Our office, along with our federal partners, is committed to pursuing anyone who attempts to exploit these funds during a national emergency. We want potential offenders to know that the consequences are serious and that we are equipped to investigate and bring them to justice.
**Interviewer:** Thank you for your time, Mr. Thompson, and for shedding light on this important issue.
**Will Thompson:** Thank you for having me. It’s crucial we keep the public informed about the integrity of our relief efforts and the importance of using funds as intended.
Ts to secure additional funding demonstrated a clear intention to exploit the relief programs designed to assist small businesses during a national emergency. These actions contributed significantly to the fraudulent nature of his claims, ultimately leading to the charges he faced.
**Interviewer:** When individuals misuse these relief funds, what consequences do they typically face, and how does this case serve as a warning to others?
**Will Thompson:** The consequences can be severe. In Bailey’s case, he was required to pay full restitution and an additional civil penalty, which serves not only as a punishment but also as a deterrent. Our office is committed to holding those who engage in this type of fraud accountable. This case should send a strong message: anyone who thinks they can manipulate these programs for personal gain will face considerable repercussions.
**Interviewer:** What role did the collaborative efforts of various agencies play in bringing Bailey to justice?
**Will Thompson:** Coordination among agencies was crucial. The investigative efforts included the NASA Office of Inspector General, the United States Secret Service, and the West Virginia State Police, among others. Their teamwork allowed us to leverage different resources and expertise, leading to a thorough investigation that ultimately resulted in this conviction. This kind of united approach is essential for addressing fraud on this scale.
**Interviewer:** Lastly, what steps is the government taking to prevent future instances of fraud related to COVID-19 relief efforts?
**Will Thompson:** The federal government is actively monitoring these relief programs, and the Pandemic Response Accountability Committee plays a significant role in combating fraud. We are utilizing advanced analytics and forensic technologies to track suspicious activities and are encouraging anyone with information on potential fraud to come forward. Transparency and accountability remain our top priorities.
**Interviewer:** Thank you for sharing these insights, Mr. Thompson. It’s important to understand the implications of such fraudulent actions during a time when many are in need of assistance.
**Will Thompson:** Thank you for the opportunity to discuss this important issue. It’s vital that we ensure these relief funds reach those who truly need them.
