Construction Company CEO Arrested for Amassing Real Estate Empire Through $4 Million in Fraudulently Obtained Covid-19 Relief Loans

A Visalia construction company CEO was arrested today on a federal criminal complaint alleging that he fraudulently obtained more than $4 million in taxpayer-funded COVID-19 relief funds and federally guaranteed small business loans, U.S. Attorney Eric Grant announced.

According to court documents, between April and June 2020, Joey Wayne Mackey, 45, of Visalia, submitted fraudulent Paycheck Protection Program (PPP) loan applications for three of his companies: Forcum-Mackey Construction Inc., a general contractor based in Ivanhoe; JWM Inc., a purported construction consulting company for which Mackey is the sole proprietor based in Mackey's Visalia home; and Mack Aviation LLC, a provider of refueling and hangar-rental services for charter jets at Visalia Municipal Airport.

All three of these applications contained fraudulent numbers of employees and monthly payroll cost calculations, which caused a bank, serving as a lending partner funding the COVID-19 relief through guaranteed small business loans, to disburse $4,082,550 in funds it otherwise would not have given. Over the following months, Mackey laundered the PPP loan funds through fraudulent payroll payments to family members (including his minor children), while Mackey controlled the bank accounts of those family members. In October 2020, Mackey then pulled the funds out of the family member accounts to buy revenue-generating real estate acquisitions, such as office parks and luxury apartment complexes from which he enriched himself further through rent payments from tenants. Mackey continued making real estate investments and luxury goods purchases traceable to PPP funds through at least 2023.

This case is the product of an investigation by the Federal Bureau of Investigation, the Federal Deposit Insurance Corporation Office of Inspector General, and the Small Business Administration Office of Inspector General. Assistant U.S. Attorneys Calvin Lee and Kevin Khasigian are prosecuting the case.

If convicted, Mackey faces a maximum statutory penalty of 30 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This effort is part of a California COVID-19 Fraud Enforcement Strike Force operation, one of five interagency COVID-19 fraud strike force teams established by the U.S. Department of Justice. The California Strike Force combines law enforcement and prosecutorial resources in the Eastern and Central Districts of California and focuses on large-scale, multistate pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces use prosecutor-led and data analyst-driven teams to identify and bring to justice those who stole pandemic relief funds.