California Woman Jailed for Stealing $1.3 Million in COVID Relief and $700,000 in Oregon Business Payroll Taxes

A California woman, 43-year-old Jamie McGowen, who stole almost $1.3 million in Covid-relief program funds and failed to pay the IRS over $700,000 in payroll taxes she collected from the employees of a small business in Salem, Oregon, has been jailed.

Court documents indicate that McGowen owned or partially owned nine separate companies, including Salem Outsourcing, Inc., a payroll processing company based in Salem. She has been sentenced for two schemes:

Payroll Tax Theft at Salem Outsourcing

McGowen provided payroll processing services to a small business also located in Salem between August 2016 and December 2019 but failed to pay the IRS $705,613 in payroll taxes she withheld from the paychecks of the company’s employees over this period.

She kept the money for herself and used some of it to buy a 100% ownership stake in the same company whose payroll taxes she had stolen.

Fraudulent COVID Relief Loan Schemes

In her next scheme, McGowen stole over $1.2 million from federal relief programs earmarked to help small businesses during the COVID-19 pandemic between April 2020 and December 2021.

McGowen made numerous false statements in 15 separate loan applications to access the funds from the Paycheck Protection Program, Economic Injury Disaster Loan Program, and Restaurant Revitalization Fund.

McGowen said she owned no other company, inflated the number of employees and revenues, and filed false tax documents.

She also made false loan forgiveness applications, saying her companies had used the funds received for payroll even though she had transferred the money around her businesses to her father and her personal checking account and paid off personal credit cards.

After a federal grand jury in Portland returned a seven-count indictment charging McGowen with wire fraud, bank fraud, and money laundering on October 12, 2022, the case was eventually heard on December 11, 2024. McGowen pleaded guilty to one count each of wire fraud and bank fraud and two counts of money laundering.

McGowen was sentenced to 37 months in federal prison plus five years of supervised release. She was also ordered to pay $2,072,860 in restitution to the IRS and the U.S. Small Business Administration (SBA).