Bailey's Trucking LLC and Xavier J. Bailey, of 226 West St., Tutwiler, are named in a four-count, federal civil lawsuit alleging the misuse of $143,738 in Paycheck Protection Program funds.
A June 10 filing in U.S. District Court at Oxford by U.S. Attorney Clay Joyner seeks to recover the $143,738 plus loan processing fees, 1% interest applied from the April 8, 2021, date of the loan, as well as costs, filing fees and any other damages that might be awarded.
In addition, the government seeks "the maximum civil penalties allowed by law" for two alleged violations of the U.S. False Claims Act. Those penalties range from a minimum of $12,537 to a maximum of $25,076 per violation.
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A jury trial has been demanded by the government.
The complaint charges that Xavier Bailey was involved in obtaining a PPP loan, "believed to be with the assistance of unnamed individuals," through "misrepresentations in a loan application" filed with an unnamed financial institution.
It is alleged that Bailey's "misrepresented its payroll costs, which were used in calculating the maximum loan amount for which Defendant was eligible. This misrepresentation caused Defendants to receive loan proceeds well in excess of what it would be entitled, if any at all."
During a March 18, 2022, interview with an investigator from the U.S. Attorney's Office in Oxford, Bailey is said to have provided the following information, according to the complaint:
"a. Bailey purported to operate a self-employed general freight trucking business, NAICS 484122, with 9 employees as Bailey’s Trucking LLC prior to the pandemic. Said entity was not registered with the Mississippi Secretary of State until Dec. 23, 2020, with Xavier Bailey as the sole officer.
"b. Bailey claimed to earn the requisite income during the covered period that would yield the amount of the loan received. In order to receive a loan of $143,738, the maximum loan amount guidelines required Bailey to have total eligible payroll costs of an average of at least $689,000 for the 12 months preceding the loan. Bailey had no such eligible payroll costs. Bailey claimed to utilize '1099 workers' whom he claimed as employees clearly in violation of the loan eligibility criteria.
"c. Bailey confirmed that he electronically signed the PPP application and submitted it to Bank 1. After receipt of the funds, Bailey did not use the funds as required by law.
"d. Bailey confirmed that he supplied the information on the loan application.
"e. Bailey confirmed he made the certifications to obtain the loan and to obtain forgiveness of the loan. This information and these certifications were factually false."
Bailey later "knowingly submitted a PPP forgiveness application that misrepresented his use of the PPP funds and eligibility for loan forgiveness," documents allege.
The case has been assigned to Senior District Judge Glen H. Davidson, who will be the presiding judge, and Magistrate Judge Roy Percy.
In a June 10 summons, Bailey was told he has 21 days to file an answer to the complaint. As of June 17, no answer had been filed, according to a review of documents available for the case on the website, Public Access to Court Electronic Records (PACER).
The full text of the federal complaint is both attached and posted here.
