Three local businessmen have been sentenced to prison for their roles in a multi-million-dollar scheme to defraud the Paycheck Protection Program, a pandemic program that provided low-interest financing to small businesses to pay up to eight weeks of payroll costs.
The Small Business Administration (SBA) administered the PPP program and was authorized to provide loans of up to $10 million to eligible small businesses experiencing substantial financial disruption due to the pandemic. Loan amounts were determined by the number of employees certified by the applicant.
Court documents say that Raymond Rahbar, 44, of Great Falls; Ryan Macaulay, 36, of Gambrills, Maryland; and Carl Pierre, 37, of Alexandria, co-founded BYNDfit, a fitness center planned in Washington that never opened to the public.
Between April 2020 and June 2021, Rahbar, Macaulay, and Pierre submitted PPP loan applications in which they inflated the number of BYNDfit employees to increase their purported payroll costs and obtain more money. The conspirators submitted purported payroll summaries that listed people who did not work for BYNDfit, including local students whose only interaction with BYNDfit was providing their name and personal identifying information to BYNDfit at a career fair.
In support of the applications, the conspirators also submitted fabricated tax forms.
Using the same type of misrepresentations about the number of employees, Rahbar obtained four additional PPP loans on behalf of two construction companies he controlled: AMC Building Group and American Majestic Construction. In total, Rahbar fraudulently obtained at least $3.1 million in PPP loans, and attempted to obtain over $4 million in PPP loans.
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On April 10, Rahbar pled guilty to conspiracy to commit bank fraud and aggravated identity theft. He was sentenced to four years and six months in prison.
On April 15, Macaulay pled guilty to conspiracy to commit bank fraud, bank fraud, conspiracy to commit money laundering, and unlawful monetary transactions. He was sentenced yesterday to two years in prison.
On Sept. 4, 2024, Pierre pled guilty to conspiracy to commit bank fraud. On May 30, he was sentenced to one day in prison.
Assistant U.S. Attorneys Kristin S. Starr and Avi Panth and former Assistant U.S. Attorney Christopher Hood prosecuted the case.
Lindsey Halligan, U.S. Attorney for the Eastern District of Virginia, and Reid Davis, Special Agent in Charge of the FBI Washington Field Office's Criminal Division, made the announcement after sentencing by U.S. District Judge Patricia Tolliver Giles.
Five years after the enactment of the Coronavirus Aid, Relief, and Economic Security Act, IRS Criminal Investigation has launched 2,039 tax and money laundering cases related to COVID fraud, with attempted fraud in these cases totaling $10 billion.
As of Feb. 28, 1,028 people have been indicted for their alleged COVID-related crimes, and 569 individuals have been sentenced to an average of 31 months in federal prison. IRS-CI has obtained a 97.4% conviction rate in prosecuted COVID fraud cases.
Hundreds of billions of dollars were likely lost to fraud during the pandemic, according to the U.S. Government Accountability Office. As of December 2024, the Department of Justice has charged more than 3,000 people, companies, and other entities with fraud-related crimes.
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