For-Profit Trade School Owner Found Guilty of Defrauding VA, Student Veterans | USAO-NDTX

The owner of a for-profit trade school has been convicted of bilking the U.S. Department of Veterans Affairs of $72 million and of misleading student veterans, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah. 

After approximately seven hours of deliberation, a federal jury on Thursday found Jonathan Dean Davis, the 43 year-old owner of Retail Ready Career Center, guilty of seven counts of wire fraud and four counts of money laundering. 

“Mr. Davis lied to multiple government agencies in order to swindle veterans out of their hard-won GI Bill benefits. While graduates of Retail Ready were just scraping by, Mr. Davis was living the high life,” said Acting U.S. Attorney Prerak Shah. “We are grateful to the jury for their time in helping us bring this defendant to justice. To undermine the VA is to insult the incredible sacrifices made by U.S. military veterans.”

“Owners of schools that are entrusted with the education of our nation’s veterans will be held accountable if they defraud the post-911 GI Bill program or veteran students,” stated VA OIG Special Agent in Charge Jeffrey Breen.  “Today’s guilty verdict was reached under the leadership of the U.S. Attorney’s Office, and as a result of the extensive work of special agents of the VA Office of Inspector General, the FBI, and the United States Postal Inspection Service.”

According to evidence presented at trial, Mr. Davis marketed Retail Ready’s six-week HVAC training course to veterans whose tuition and fees would be covered by the Veteran’s Educational Assistance Act of 2008, also known as the post-9/11 GI Bill. The defendant, who was essentially broke at the time of the crime, realized that he could charge $18,000 to $21,000 per student for the six-week course, if only he could get approval from the VA to accept GI Bill payments for tuition – which required prior approvals from the Texas Workforce Commission (TWC) and the Texas Veterans Commission (TVC).

These agencies required applicants to certify that they were not personally facing any criminal or civil actions, and to prove that their schools were established educational institutions in stable financial condition. Knowing he could not meet these requirements, Mr. Davis repeatedly lied and concealed information from these agencies.

“Several decisions lie ahead that will ultimately make the difference if I succeed or if I fail. More gut-wrenching conversations, more humiliating experiences, more lying is in order,” Mr. Davis wrote in an electronic journal he kept on his computer, which was recovered by federal agents during a search of Retail Ready. The journal became a key piece of evidence at trial.

Mr. Davis assured the TWC that he was not subject to any civil actions, when, in fact, he was facing numerous civil judgments over unpaid debts. He also told the TWC that he was not facing any criminal charges, when, in fact, he had a pending felony charge for theft of services. 

Chronicling his arrest in his journal, Mr. Davis wrote, “I was arrested on December 20th, last Friday night (a week ago) for a warrant that had been hanging around since April apparently. I didn’t know that I had one but it was for Theft of services for a bad check I had written in June or July of 2012 to the Doubletree for $25,000.00, which makes the charge a felony … The more complicated and damaging aspect is that having a felony arrest doesn’t do well with trying to apply for a school certificate.” 

Mr. Davis told the TVC that Retail Ready had been operating as a school for two years, when, in fact, the company had only existed for a few months and had never trained any students. He claimed that Retail Ready was fully prepared to train veterans, when, in fact, the company lacked a building and basic supplies.  He even lied to an independent accountant about the school’s financial condition, and then submitted false financial statements to both the TWC and the TVC. 

“I lied to the accountant that I am using for my audit service, I told him that I don’t have anything in the company name other than a lease and I left out having Jay being an employee and that I’ve had a bank account with expenses out of it because it is a disaster and wouldn’t project a very good picture,” Mr. Davis wrote in his journal.

Eventually, based upon Mr. Davis’ lies to the TWC and TVC, the VA accepted Retail Ready’s application, allowing Mr. Davis to charge veterans’ tuition and fees to the VA under the GI Bill.

In 2014, he began recruiting student veterans, promising to prepare them for lucrative careers in the heating and air conditioning industry. Upon entering the workforce, however, many of these veterans discovered that Retail Ready had failed to teach them many of the basic skills necessary for entry-level technician jobs.

Several veterans testified at trial that they had relied on the Retail Ready’s fraudulently obtained VA endorsement and were sorely disappointed about their post- Retail Ready career prospects and pay. They were also shocked to learn of the rate at which Retail Ready’s six-week course had drained their GI Bill benefits, testifying that they felt “used,” “taken advantage of,” “deceived,” and “bamboozled.” 

Even as his veteran graduates struggled to make ends meet, Retail Ready collected more than $72 million in GI Bill benefits from the VA.  Using the proceeds of his fraud, Mr. Davis purchased a $2.2 million home in Dallas, a $428,000 Lamborghini, a $280,000 Ferrari, and a $260,000 Bentley, among other things.

He now faces up to 180 years in federal prison. His sentencing hearing has been set for Sept. 15. 

The VA’s Office of Inspector General conducted the investigation with the assistance of the Federal Bureau of Investigation’s Dallas Field Office and the United States Postal Inspection Service’s Fort Worth Field Office.  Assistant U.S. Attorneys Douglas Brasher and Fabio Leonardi are prosecuting the case, and Assistant U.S. Attorney Dimitri Rocha is handling forfeiture. U.S. District Judge Brantley Starr presided over the trial. 

Source link

Author: Editor
The website is owned by STL.News, LLC. However, the website is hosted, designed, and maintained by WebTech Group, a web host, and design agency based in St. Louis, Missouri. USDOJ.Today focuses on aggregating content from the US Attorney's Offices around the country. STL.News uses this content to publish national news at https://STL.News