Court filing

Answer of RKB, Inc. — U.S. v. Bailey

Record facts

Court	U.S. District Court, Southern District of West Virginia
Filed	2026-02-24

U.S. District Court, Southern District of West Virginia · No. 5:24-cv-00456 · Doc. 30 · 2026-02-24 · Docket on CourtListener

Summary

The Answer of RKB, Inc. to the Complaint in United States of America v. Ryan Bailey and RKB, Inc., Civil Action No. 5:24-CV-00456, in the U.S. District Court for the Southern District of West Virginia, Beckley Division, filed February 24, 2026 as Doc. 30. Through counsel James R. Sheatsley, RKB, Inc. responds paragraph by paragraph, admitting many averments and stating it lacks knowledge sufficient to form a belief as to others. It admits it was the applicant on the referenced SBA Guaranteed PPP Loan disbursed on or about June 1, 2020 and on the SBA EIDL loan, and neither admits nor denies averments not directed at it. The answer denies all averments not admitted and states that Codefendant Ryan Bailey is negotiating with the Plaintiff over financial compensation, which it avers would render the civil action moot. The eight-page filing ends with a certificate of service.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
Beckley Division

UNITED STATES OF AMERICA,

Plaintiff,
v.

Civil Action No.: 5:24-CV-00456

RYAN BAILEY and RKB, INC.

Defendant.

ANSWER OF RKB, INC. TO COMPLAINT

Now comes the Defendant, RKB, Inc., by and through the undersigned counsel,
James R. Sheatsley, and by way of response to the Complaint, states as follows.
1.
The Defendant, RKB, Inc., admits the averments of paragraph 1 of the Complaint.
2.
The Defendant, RKB, Inc., admits the averments of paragraph 2 of the Complaint.
3.
The Defendant, RKB, Inc. admits the averments of paragraph 3 of the Complaint.
4.
The Defendant, RKB, Inc., admits the averments of paragraph 4 of the Complaint.
5.
The Defendant, RKB, Inc., admits the averments of paragraph 5 of the Complaint.
6.
The Defendant, RKB, Inc., admits the averments of paragraph 6 of the Complaint.

7.
The Defendant, RKB, Inc., admits the averments of paragraph 7 of the Complaint.
8.
The Defendant, RKB, Inc., admits the averments of paragraph 8 of the Complaint.
9.
The Defendant, RKB, Inc., admits the averments of paragraph 9 of the Complaint.
10. The Defendant, RKB, Inc., admits the averments of paragraph 10 of the Complaint.
11.
The Defendant, RKB, Inc., admits the averments of paragraph 11 of the Complaint.
12.
The Defendant, RKB, Inc., admits the averments of paragraph 12 of the Complaint.
13. The Defendant, RKB, Inc., admits the averments of paragraph 13 of the Complaint.
14.
The Defendant, RKB, Inc., admits the averments of paragraph 14 of the Complaint.
15. The Defendant, RKB, Inc., admits the averments of paragraph 15 of the Complaint.
Case 5:24-cv-00456 Document 30 Filed 02/24/26 Page 1 of 8 PageID #: 147

16. The Defendant, RKB, Inc., admits the averments of paragraph 16 of the Complaint.
17.
The Defendant, RKB, Inc., admits the averments of paragraph 17 of the Complaint.
18. The Defendant, RKB, Inc., admits the averments of paragraph 18 of the Complaint.
19. The Defendant, RKB, Inc., admits the averments of paragraph 19 of the Complaint.
20. The Defendant, RKB, Inc., admits the averments of paragraph 20 of the Complaint.
21. The Defendant, RKB, Inc., admits the averments of paragraph 21 of the Complaint.
22. The Defendant, RKB, Inc., admits the averments of paragraph 22 of the Complaint.
23. The Defendant, RKB, Inc., admits the averments of paragraph 23 of the Complaint.
24.
The Defendant, RKB, Inc., admits the averments of paragraph 24 of the Complaint.
25.
The Defendant, RKB, Inc., admits the averments of paragraph 25 of the Complaint.
26. The Defendant, RKB, Inc., admits the averments of paragraph 26 of the Complaint.
27.
The Defendant, RKB, Inc., admits the averments of paragraph 27 of the Complaint.
28.
The Defendant, RKB, Inc. admits the averments of paragraph 28 of the Complaint.
29. The Defendant, RKB, Inc., admits that it was the applicant set forth on the
referenced SBA Guaranteed PPP Loan which was disbursed on or about June 1, 2020.
The Defendant is without knowledge or information sufficient to form a belief as to the
truth of the averments that “a portion of the proceeds from the PPP loan was not used for
authorized purposes”.
30.
The Defendant, RKB, Inc., admits that it was the applicant set forth on the SBA
EIDL loan referenced in paragraph 30 of the Complaint. The Defendant is without
knowledge or information sufficient to form a belief as to the truth of the averment that “a
portion of the proceeds from the EIDL loan was not used for that authorized purpose”.
Case 5:24-cv-00456 Document 30 Filed 02/24/26 Page 2 of 8 PageID #: 148

31.
The Defendant, RKB, Inc., admits the investigation undertaken by the Plaintiff
described in paragraph 31 of the Complaint
31.
The Defendant, RKB, Inc., admits the investigation undertaken by the Plaintiff
described in paragraph 32 of the Complaint.
33.
The Defendant, RKB, Inc., is without knowledge or information sufficient to form a
belief as to the truth of the averments of paragraph 33 of the Complaint.
34.
The Defendant, RKB, Inc., admits the averments of paragraph 34 of the Complaint.
35. The Defendant, RKB, Inc., is without knowledge or information sufficient to form a
belief as to the truth of the averment of paragraph 35 of the Complaint which simply states
“the Defendants still owe the balance of the EIDL loan”. Upon information and belief,
substantial portions of said loan have been returned.
36.
The Defendant, RKB, Inc., incorporates its responses to paragraphs 1 through 35
of the Complaint as if restated herein.
37.
The averments of paragraph 37 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 37 of the Complaint.
38.
The averments of paragraph 38 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 38 of the Complaint.
39.
The averments of paragraph 39 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 39 of the Complaint.
Case 5:24-cv-00456 Document 30 Filed 02/24/26 Page 3 of 8 PageID #: 149

40.
The averments of paragraph 40 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 40 of the Complaint.
41.
The Defendant, RKB, Inc., incorporates its responses to paragraphs 1 through 40
of the Complaint as if restated herein.
42.
The Defendant, RKB, Inc., incorporates its responses to paragraphs 1 through 41
of the Complaint as if restated herein.
43.
The Defendant, RKB, Inc., is without knowledge or information sufficient to form a
belief as to the truth of the averments of paragraph 43 of the Complaint.
44.
The averments of paragraph 44 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 44 of the Complaint.
45.
The Defendant, RKB, Inc., is without knowledge or information sufficient to form a
belief as to the truth of the averments of paragraph 45 of the Complaint.
46.
The Defendant, RKB, Inc., incorporates its responses to paragraphs 1 through 45
of the Complaint as if restated herein.
47.
The Defendant, RKB, Inc., admits that the statement set forth in paragraph 47 of
the Complaint is also set forth in the terms of the EIDL Loan Agreement.
48.
The averments of paragraph 48 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 48 of the Complaint.
Case 5:24-cv-00456 Document 30 Filed 02/24/26 Page 4 of 8 PageID #: 150

48. NOTE: This is a second number 48. The Defendant, RKB, Inc., is without
knowledge or information sufficient to form a belief as to the truth of the averments of
paragraph 48 of the Complaint.
49.
The Defendant, RKB, Inc., incorporates its responses to paragraphs 1 through 48
of the Complaint as if restated herein.
50.
The Defendant, RKB, Inc., admits the nature of the claim brought in this action.
51.
The Defendant, RKB, Inc., has admitted that it was the applicant on the described
loans.
52.
The averments of paragraph 52 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 52 of the Complaint.
53.
The Defendant, RKB, Inc., is without knowledge or information sufficient to form a
belief as to the truth of the averments of paragraph 53 of the Complaint.
54.
The Defendant, RKB, Inc., incorporates its responses to paragraphs 1 through 53
of the Complaint as if restated herein.
55.
The averments of paragraph 55 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 55 of the Complaint.
56.
The averments of paragraph 56 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 56 of the Complaint.
57.
The Defendant, RKB, Inc., is without knowledge or information sufficient to form a
belief as to the truth of the amount of damages that the Plaintiff seeks or may recover.
Case 5:24-cv-00456 Document 30 Filed 02/24/26 Page 5 of 8 PageID #: 151

58.
The Defendant, RKB, Inc., incorporates its responses to paragraphs 1 through 57
of the Complaint as if restated herein.
59.
The averments of paragraph 59 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 59 of the Complaint.
60.
The averments of paragraph 60 of the Complaint are not alleged to be actions or
averments as against the Defendant, RKB, Inc., therefore, the Defendant, RKB, Inc.,
neither admits nor denies the averments of paragraph 60 of the Complaint.
61.
The Defendant, RKB, Inc., denies all averments of the Complaint not herein
admitted and demands strict proof thereof.
62.
The Defendant, RKB, Inc., affirmatively states, upon information and be lief, that
Codefendant, Ryan Bailey, is actively in the process of negotiations with the Plaintiff with
the assistance of counsel for Codefendant, Ryan Bailey, relating to financial
compensation or reimbursement to the Plaintiff with regard to the matters which are the
subject of this civil action. The Defendant, RKB, Inc., respectfully avers that upon
resolution of the financial issues in that certain ongoing criminal prosecution as between
the Plaintiff and Defendant, Ryan Bailey, the matters set forth in this civil action will be
rendered moot.
63.
The Defendant, RKB, Inc., denies that the Plaintiff is entitled to the relief demanded
in light of the pending negotiations for resolution of the financial aspects of the criminal
prosecution of the said Ryan Bailey.

Case 5:24-cv-00456 Document 30 Filed 02/24/26 Page 6 of 8 PageID #: 152

RKB, Inc.

By Counsel,

/s/ James R. Sheatsley

James R. Sheatsley (WVBN 3359)

Gorman, Sheatsley & Company, LC

343 Prince Street, Suite B

Beckley, WV 25801

Phone: (304) 252-5321

jsheatsley@gormansheatsley.org

Case 5:24-cv-00456 Document 30 Filed 02/24/26 Page 7 of 8 PageID #: 153

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
Beckley Division

UNITED STATES OF AMERICA,

Plaintiff,
v.

Civil Action No.: 5:24-CV-00456

RYAN BAILEY and RKB, INC.

Defendant.

CERTIFICATE OF SERVICE

I, James R. Sheatsley, counsel for the Defendant, RKB, Inc., do hereby certify that
I electronically filed the foregoing ANSWER OF RKB, INC. TO COMPLAINT with the U.S.
District Court, Southern District of West Virginia using the CM/ECF system maintained by
the Court which will notify the following person(s) via electronic mail this the 24th day of
February, 2026.

Fred B. Westfall, Jr.
Assistant United States Attorney
.300 Virginia Street East, Room 4000
Charleston, WV 25301
Counsel for the Plaintiff

G. Todd Houck
Hrko Building
105 Guyandotte Avenue
Mullens, WV 25882
Counsel for Ryan Bailey