Woman sentenced for schemes totaling $2 million after buying out Salem business she defrauded

PORTLAND, Ore. (KOIN) — A woman from California was sentenced to more than three years in prison after a jury in a federal court in Oregon found her guilty of multiple illegal schemes, including defrauding a business based in Salem.

Jamie McGowen, 43, was found guilty of stealing about $2 million in total, the U.S. Department of Justice said. One scheme involved fraudulently collecting $1.3 million in federal COVID relief funds. Another scheme involved stealing $700,000 in payroll taxes she collected from a Salem business.

“According to court documents, McGowen was the owner or partial owner of nine separate companies including Salem Outsourcing, Inc., a payroll processing company based in Salem. Between August 2016 and December 2019, McGowen provided payroll processing services to a small business also located in Salem,” the U.S. DOJ said. “During this time, she failed to pay the IRS $705,613 in payroll taxes she withheld from the paychecks of the company’s employees. Instead, McGowen kept the money for herself and used a portion of the funds to, among other things, purchase a 100% ownership stake in the same company whose payroll taxes she had stolen.”

In a separate scheme, McGowen stole more than $1.2 million at the height of the COVID-19 pandemic, between April 2020 and December 2021. She fraudulently applied for and was granted money from federal relief programs to help small businesses, such as the Paycheck Protection Program and others.

“McGowen made numerous false statements in 15 separate loan applications, including by stating she did not own any other company, inflating the number of employees and revenues, and providing false tax documents,” prosecutors said.

McGowen had used the money to pay off personal credit cards, pad her own personal checking account, and give some cash to her father, among other things, rather than using it for payroll as she’d claimed.

McGowen pled guilty to wire fraud, bank fraud and two counts of money laundering. She was sentenced to 37 months in federal prison, five years’ supervised released, and ordered to pay over $2 million in restitution to the IRS and the U.S. Small Business Administration.