Indictment — United States v. Ross Jay Bailey (Criminal No. 5:24-cr-00105) (S.D. W. Va. No. 5:24-cr-00105)

Record facts

U.S. District Court, Southern District of West Virginia (Beckley) · No. 5:24-cr-00105 · Doc. 1 · 2024-06-26 · Docket on CourtListener

Full text

UNITED STATES DISTRICT COURT FOR THE—— =>
SOUTHERN DISTRICT OF WEST VIRGINIA | FILED hi

CHARLESTON GRAND JURY 2023
JUNE 25, 2024 SESSION JUN 26 ai
Pe ‘ aaa Sr
UNITED STATES OF AMERICA ee Sneha
Vv. CRIMINAL NO. 5. 2Y — ¢(r-00l105
18 U.S.C. § 641
18 U.S.C. § 1957

ROSS JAY BATLEY

INDICTMENT

The Grand Jury Charges:

Background

1. The United States Small Business Administration (“SBA”)
was an agency of the executive branch of the United States
government that provided support to entrepreneurs and small
businesses. The mission of the SBA was to maintain and strengthen
the nation's economy by enabling the establishment and viability
of small businesses and by assisting in the economic recovery of
communities after disasters.

Zs The Economic Injury Disaster Loan Program (“EIDL”) was an
SBA program that provided low-interest financing to small
businesses, renters, and homeowners in regions affected by declared
disasters.

Bs The Coronavirus Aid, Relief, and Economic Security Act

(“CARES Act”) authorized the SBA to provide EIDL loans of up to
$2 million to eligible small businesses experiencing substantial
financial disruption due to the COVID-19 pandemic.

4. To obtain an EIDL loan, a qualifying business applied to
the SBA and provided information about the business’s operations,
such as the number of employees, gross revenues for the 12-month
period preceding the disaster, and cost of goods sold in the 12-
month period preceding the disaster. In the case of EIDL loan funds
for COVID-19 relief issued pursuant to the CARES Act, the 12-month
period was from January 31, 2019, to January 31, 2020. EIDL loan
funds authorized pursuant to the CARES Act were restricted to
working capital usage for businesses to alleviate economic injury
caused by the disaster and were not to be used for other purposes.
The applicant was also required to certify that all of the
information submitted in the EIDL loan application was true and
correct to the best of the applicant’s knowledge.

5. EIDL loan applications were submitted directly to the SBA
and processed by the agency with support from a government
contractor. If the application was approved, the amount of the loan
was based, in part, on the information provided by the applicant

about employment, revenue, and cost of goods sold. Any funds issued
under an EIDL loan were issued directly by the SBA.

Background of defendant ROSS JAY BAILEY

At all relevant times:

6. Defendant ROSS JAY BAILEY was a resident of Beckley,
Raleigh County, West Virginia, and within the Southern District of
West Virginia. Defendant ROSS JAY BAILEY owned a business located
in Beckley called R&R Delivery Service, Inc., an S corporation (“R&R
Delivery”) incorporated in 2005 with the West Virginia Secretary of
State’s Office. Defendant ROSS JAY BAILEY was the President and sole
owner of R&R Delivery from at least 2005 through at least 2023.

Bank Accounts controlled by defendant ROSS JAY BAILEY

7. Defendant ROSS JAY BAILEY maintained bank accounts at
First Community Bank (“FCB”), a financial corporation located in
Bluefield, Virginia that had numerous bank branches throughout West
Virginia and Virginia. FCB was a financial institution as defined
by 18 U.S.C. § 20.

8. Defendant ROSS JAY BAILEY was an authorized signer on each
of the FCB accounts listed below:

a. Business Account in the name of R&R Delivery, account
number XXX2660 (“R&R Delivery’s Business Account”);

b. Personal Account in the name of defendant ROSS JAY
BATLEY, J.B., and S.K., account number XXX2781

(“Personal Account”).

9. Defendant ROSS JAY BAILEY was the authorized signer on
Ally Investment Securities personal brokerage account, account
number XXX-XXXXX-XX RR A34 (“Ally”).

10. Defendant ROSS JAY BAILEY was the authorized signer of
Apex Clearing Corporation, account number XXX-XXXXX-XX RR A34
(“Apex Clearing”). Additionally, Apex Clearing Corporation and
Ally Invest Securities are associated financial entities.

The EIDL obtained by defendant ROSS JAY BAILEY

11. On or about June 30, 2020, defendant ROSS JAY BAILEY
obtained an EIDL loan (SBA Loan #XXXXXX8002) from the SBA in the
amount of $150,000.00, to be used for working capital to alleviate
economic injury caused by the pandemic occurring in the month of
March 2020, and continuing thereafter. In August 2021, defendant
ROSS JAY BAILEY sought a modification of the amount of the original
EBEIDL loan through an Amended Loan Authorization and Agreement
(“LAGA”) . This modification was approved on or about August 31,
2021, and the amount of the loan was increased from $150,000.00 to
$500,000.00.

12. On or about February 25, 2022, defendant ROSS JAY BAILEY
sought an additional modification of the EIDL loan through another
LAGA. As a requirement of the SBA’s Amended LA&A, defendant ROSS
JAY BAILEY signed and certified as the Owner/Officer of R&R Delivery
on February 25, 2022, that the “Borrower will use all the proceeds

of this loan solely as working capital to alleviate economic injury
caused by disaster occurring in the month of January 31, 2020, and
continuing thereafter .”

13. The certifications made by defendant ROSS JAY BAILEY or
on his behalf and at his request, induced the SBA to modify the
loan amount from $500,000.00 to $2,000,000.00 (SBA Loan
#XXXXXX8002), a loan modification of $1,500,000.00.

14. Proceeds of the $1,500,000.00 loan modification were
deposited by electronic transfer into R&R Delivery’s Business

Account on or about March 1, 2022.

The Scheme to Defraud

15. From on or about March 1, 2022, through on or about May
31, 2022, defendant ROSS JAY BAILEY fraudulently used an amount of
not less than $1,400,000.00 of the EIDL loan proceeds described
above for his personal benefit by transferring EIDL funds from the
R&R Delivery Business Account to his Personal Account. After these
funds were transferred to defendant ROSS JAY BAILEY’S Personal
Account XXX2781, he transferred a substantial portion of the EIDL
loan proceeds to his Ally account and used the monies for his

personal enrichment.

Specific Offense Conduct

16. The following checks, interbank transfers and account

withdraws detail the approximate $1,400,000.00 theft as noted above:
DATE AMOUNT PAYEE / DESCRIPTION

Transfer to defendant ROSS
JAY BAILEY’s Personal
Account XXX2781

Transfer to defendant ROSS
JAY BAILEY’s Personal
Account XXX2781

3/8/22 $700,000.00

4/1/22 $700,000.00

17. After defendant ROSS JAY BATLEY transferred the
$1,400,000.00 to his Personal Account, he then made multiple
transfers from his Personal Account to his Ally account. These
transfers were for defendant ROSS JAY BAILEY’s personal enrichment.
Once there, defendant ROSS JAY BAILEY converted these funds into
purchases of stock and cryptocurrency.

18. On or about December 30, 2022, $1,600,000.00 was
transferred to defendant ROSS JAY BAILEY from the Ally account to
his Personal Account.

a. On or about December 30, 2022, defendant ROSS JAY
BAILEY transferred $1,600,000.00 from his Personal
Account to his R&R Delivery Business Account.

b. On or about January 6, 2023, defendant ROSS JAY BAILEY
transferred $1,500,000.00 from his R&R Delivery
Business Account to his Personal Account.

c. On or about January 10, 2023, defendant ROSS JAY BAILEY

transferred $600,000.00 from his R&R Delivery Business
Account to his Personal Account.

d. On or about January 11, 2023, defendant ROSS JAY BAILEY
transferred $200,000.00 from his R&R Delivery Business
Account to his Personal Account.

e. On or about January 11, 2023, defendant ROSS JAY BAILEY
transferred $2,000,000.00 from his Personal Account to
his Ally account.

19. Defendant ROSS JAY BAILEY knew that he was not entitled
to receive, withdraw, and convert to his own use monies received in
the bank account from the SBA Loan #XXXXXX8002 because the EIDL loan
program issued pursuant to the CARES ACT limited the use of his EIDL
loan monies to R&R Delivery’s working capital for COVID relief.

20. From March 2022 to May 31, 2022, at or near Beckley,
Raleigh County and within the Southern District of West Virginia
and elsewhere, defendant ROSS JAY BAILEY did knowingly and willfully
steal and convert to his own use government monies, that is, EIDL
loan monies from the SBA, having a total value of approximately
$1,400,000.00. Defendant did this by transferring $700,000.00 on
March 8, 2022 from the R&R Delivery Account (XXX2660) to the
Defendant’s Personal Account (XXX2781); and by transferring
$700,000.00 on April 1, 2022 from the R&R Delivery Account (XXX2660)

to the Defendant’s Personal Account (XXX2781).
21.

On or about March 8,

2022,

defendant ROSS JAY BAILEY did

knowingly and willfully steal and convert to his own use EIDL loan

monies from the
$700,000.00.
22.

SBA having

On or about April 1,

2022,

a total

value of

approximately

defendant ROSS JAY BAILEY did

knowingly and willfully steal and convert to his own use EIDL loan

monies from the SBA having a total value of approximately
$700,000.00.
From To
Count Date Account Name Account Name Amount
Number Number
Defendant
ROSS JAY
1 3/8/22 XXX2660 SBA XXX2781 BAILEY’ s $700,000.00
Personal
Account
Defendant
ROSS JAY
2 4/1/22 XXX2660 SBA XXX2781 BAILEY’ s $700,000.00
Personal
Account

In violation of Title 18,

United States Code,

Section 641.

COUNTS THREE THROUGH THIRTY-ONE

23. The Grand Jury realleges and incorporates by reference
Paragraphs 1 through 22 of this Indictment as though fully set forth
herein.

24. On or about March 1, 2022, to on or about June 1, 2022,
in the Southern District of West Virginia and elsewhere, defendant
ROSS JAY BAILEY, knowingly engaged in monetary transactions by and
through a financial institution, affecting interstate commerce,
involving criminally derived property of a value greater than

$10,000.00, which property was derived from specified unlawful

activity (Theft of Government Funds), namely the following
transactions:
From To
Count Date Account Name Account Name Amount
Number Number
J.B.,
defendant vena
3 3/9/22 XXX2781 | ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant vata
4 3/11/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant van
5 3/14/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.

J.B.,

defendant vos
6 3/15/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, ABA
and S.K.
J.B., _
defendant vost
7 3/17/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant vest
8 3/18/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant vote
9 3/23/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B., _
defendant vane
10 3/24/22 | XXX2781 | ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B., xX
defendant XXXXK—
11 3/25/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B., -
defendant von
12 3/29/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B., -
defendant veers
13 3/30/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B., _
defendant Kostnk
14 4/5/22 XXX2781 ROSS JAY Ally $700,000.00
XX RR
BAILEY, A34
and S.K.

10

J.B.,

defendant vos
15 4/22/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, a34
and S.K.
J.B.,
defendant vate
16 4/27/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant vaste
17 4/29/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant ven
18 5/6/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant vote
19 5/10/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B., _
defendant vacate
20 5/13/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant vesstse-
21 5/18/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant vaste
22 5/19/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant van
23 5/24/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.

11

J.B.,
defendant vost
24 5/27/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
J.B.,
defendant voto
25 5/31/22 XXX2781 ROSS JAY Ally $30,000.00
XX RR
BAILEY, A34
and S.K.
XXX~ J.B.,
XXX XK defendant
26 12/30/22 XX RR Ally XXX2781 ROSS JAY $1,600,000.00
A34 BAILEY,
and S.K.
J.B.,
defendant R&R
27 12/30/22 | XXX2781 ROSS JAY | XXX2660 Delivery $1,600,000.00
BAILEY, Inc.
and S.K.
J.B.,
R&R defendant
28 1/6/23 XXX2660 | Delivery | XXX2781 |] ROSS JAY | $1,500,000.00
Inc. BAILEY,
and S.K.
J.B.,
R&R defendant
29 1/10/23 XXX2660 Delivery | XXX2781 ROSS JAY $600,000.00
Inc. BAILEY,
and S.K.
J.B.,
R&R defendant
30 1/11/23 XXX2660 Delivery | XXX2781 ROSS JAY $200,000.00
Inc. BAILEY,
and S.K.
J.B., XxX
defendant YXXXX— Apex
31 1/11/23 XXX2781 ROSS JAY . $2,000,000.00
XX RR Clearing
BAILEY, A34
and S.K.

25. Defendant ROSS JAY BAILEY conducted money laundering

transactions totaling approximately $8,860,000.00.

In violation of Title 18,

12

United States Code,

Section 1957.

Notice of Forfeiture

1. The allegations contained in this Indictment are
hereby realleged and incorporated by reference for the purpose
of giving notice of forfeiture pursuant to 18 U.S.C. S$ 981,
982 and 28 U.S.C. § 246l1(c).

2. Pursuant to 18 U.S.C. §§ 981(a)(1)(C), 982(a) (1), 28
U.S.C. § 2461(c) and Rule 32.2 of the Federal Rules of Criminal
Procedure, and premised upon conviction of defendant ROSS JAY
BAILEY of the offenses in violation of 18 U.S.C. § 641, as
charged in Counts 1 and 2 of this Indictment, or 18 U.S.C.
§ 1957, as charge in Counts 3 through 31 of this Indictment,
defendant ROSS JAY BAILEY shall forfeit to the United States of
America any property real or personal which constituting, or
derived from, any proceeds traceable to the violations charged
herein, and any property involved in or used in the offense(s).

3. Under Section 2461 (c), criminal forfeiture is
applicable to any offenses for which forfeiture is authorized by
any other statute, including, but not limited to 18 U.S.C.
S§§ 981, 982 and all specified unlawful activities listed or
referenced in 18 U.S.C. § 1957, which are incorporated as to
proceeds by Section 982(a) (1). The following property is subject

to forfeiture in accordance with Section 982 and/or 2461 (c):

13
a. All property which constitutes or is derived from

proceeds of the violations set forth in this
Indictment;
| b. All property involved in such violations or traceable
to property involved in such violations; and
c.If, as set forth in 21 U.S.C. § 853(p), any property
described in (a) or (b) cannot be located upon the
exercise of due diligence, has been transferred or
sold to, or deposited with, a third party, has been
placed beyond the jurisdiction of the court, has been
substantially diminished in value, or has’ been
commingled with other property which cannot’ be
divided without difficulty, all other property of
the defendant's to the extent of the value of the
property described in (a) and (b).
The following property is subject to forfeiture on one or
more grounds stated above:
1. $168,849.42 from First Community Bank account no.
XXX2781;

2. $299,604.40 from First Community Bank account no.

XXX2 600;

14
3. $2,333,832.28 from Ally Investment Securities account
no. XXX-XXXXX-XX RR A34;

4. $45,000.00 from Ally Investment Securities account no.
XXX-XXXXX-XX RR A34;

5. a forfeiture money judgment in the amount of
approximately $6,012,713.90, such amount constituting
the proceeds of the violations set forth in this
Indictment and including such relevant conduct that is

included in this Indictment.

WILLIAM S. THOMPSON
United States Attorney

By: Gk sy

ERIK S. GOES
Assistant United States Attorney

15

File and source

File

gov.uscourts.wvsd.236863.15.1.pdf

Size

1,063,026 bytes

SHA-256

1315ccb226dc8a8e7a5f2984ba7781b5280cdb32b7af7c2454e20a3fb809c6e1

Our copy

gov.uscourts.wvsd.236863.15.1.pdf

Original

PACER (login required)