Northern Virginia men found guilty of $7M COVID relief fraud scheme

A Manassas man and a Bealeton man pleaded guilty Friday to engaging in a joint scheme to defraud banks and the Small Business Administration of over $7 million in COVID-19 pandemic relief funds, according to the U.S. Attorney's Office of the Eastern District of Virginia.

Citing court documents, the U.S. Attorney's Office said from approximately April 2020 to March 2021, Bennie Earl Magee, 54, of Manassas, falsified payroll records, created fake IRS business tax returns and submitted to lenders and the SBA falsified revenue reports of multiple companies to obtain over $7 million in Paycheck Protection Program and Economic Injury Disaster Loan loans for himself and others.

Michael Gilcher, 45, of Bealeton, obtained $1.4 million of the total but wrote checks back to Magee’s company, Bull Run Capital, totaling approximately $620,000. Magee used the PPP funds to invest in crypto currency, home renovations, to purchase vehicles and to pay other personal expenses, according to a news release.

Magee and Gilcher are scheduled to be sentenced on Aug. 25. Magee faces up to 20 years in prison, while Gilcher faces up to five years in prison. Actual sentences for federal crimes are typically less than the maximum penalties, the release states.

This case was investigated by an agent assigned to the Pandemic Response Accountability Committee (PRAC) Fraud Task Force. The PRAC was established to serve the public by promoting transparency and facilitating coordinated oversight of the federal government’s COVID-19 pandemic response, according to the U.S. Attorney’s Office. The PRAC’s 21 member inspectors general identify major risks that cross program and agency boundaries to detect fraud, waste, abuse and mismanagement in the more than $5 trillion in COVID-19 spending. Task force agents who are detailed to the PRAC receive expanded authority to investigate pandemic fraud as well as tools and training to support their investigations.

Jessica D. Aber, U.S. attorney for the Eastern District of Virginia; Wayne A. Jacobs, special agent in charge of the FBI Washington Field Office Criminal Division; and Brian Miller, inspector general for the special inspector general for pandemic recovery (SIGPR), made the announcement after Senior U.S. District Judge Claude M. Hilton accepted the plea.

Assistant U.S. attorneys Russell L. Carlberg and Kathleen Robeson are prosecuting the case.