BALTIMORE, MD—A former employee of Baltimore City has been sentenced to prison following a conviction for a bribery and wire fraud scheme.
U.S. District Judge Richard D. Bennett sentenced Joseph Gillespie, 35, of Baltimore City, to four years in federal prison along with three years of supervised release related to his involvement in a bribery and conspiracy to commit wire fraud scheme pertaining to COVID-19 CARES Act relief benefits.
In a covert video conversation with the UC, Gillespie claimed he could “wipe a bill off” the City’s records regarding outstanding obligations for specific properties or “put paid next to ‘em,” despite the financial obligation not being settled. He also mentioned that he had removed certain financial obligations tied to properties that the UC claimed ownership of, stating, “[t]here were a couple, extra miscellaneous bills that y’all had that I wiped off . . . . That s*** gone now.”
Gillespie further delayed the payment deadline of financial obligations for eight properties by three months in exchange for $800 in bribes—$100 for each property. During the recorded encounter, the UC paid Gillespie $800 in cash. Gillespie indicated that he was also able to eliminate overdue water bills owed to the City, saying, “Once I let you know [about a big water bill], I’ll give it to my girl, and I’ll tell you what you need to give me for her to knock it off.” He continued:
“Going forward, I’m just your inside man . . . That’s what I do for a lot of different people around the City. You know what I mean – manage their s*** for them a little bit. . . . I’m gonna go look at your s***. Anyone with a high water bill I’m gonna text you the address, and I’m gonna tell you what I need, and we can knock them out going forward with that . . . . Any water bill that’s too high, I’ll get my girl to take care of that.”
Gillespie continued his bribery operations for years and admitted to involving several co-conspirators in his scheme. His plea agreement stated that Gillespie received over $250,000 from the bribery activities and caused the City losses exceeding $1,250,000.
In addition to his bribery activities, Gillespie was also involved in a fraudulent scheme to acquire COVID-19 CARES relief funds. The CARES Act provided financial assistance to small businesses through forgivable loans for job retention and specific expenses via the Paycheck Protection Program (PPP), managed by the United States Small Business Administration (SBA).
In 2021, Gillespie and co-defendant Ahmed (“Adam”) Sary submitted a fraudulent PPP loan application to Cross River Bank for a loan for JAG Investments (“JAG”), which Gillespie owned. This loan application was filled with multiple material misrepresentations, including a claim that JAG had 19 employees in 2019 and an average monthly payroll exceeding $55,000. To support this application, a fabricated 2019 Internal Revenue Service (“IRS”) Form 940 – Employer’s Annual Federal Unemployment Tax Return – was submitted, falsely indicating that JAG’s total employee payments in 2019 exceeded $275,000.
Based on these false claims and fraudulent submissions made by Gillespie as the owner of JAG, the PPP loan was funded on March 6, 2021, resulting in approximately $138,000 being deposited into a bank account controlled by Gillespie. He agreed to pay Sary kickbacks totaling $38,000 for his role in submitting the fraudulent application and securing the PPP loan. Furthermore, after receiving the loan, Gillespie set up payroll services for JAG to create documentation that would be used later to validate a request for loan forgiveness.
The District of Maryland COVID-19 Strike Force is one of five strike forces across the United States established by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, particularly fraud associated with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This legislation was designed to provide emergency financial assistance to individuals affected economically by the COVID-19 pandemic, focusing on large-scale, multi-state fraud committed by criminal organizations and transnational actors. The strike forces are collaborative law enforcement initiatives, utilizing prosecutor-led and data-driven teams aimed at identifying and prosecuting those who appropriated pandemic relief funds unlawfully.
Photo by Sora Shimazaki from Pexels
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