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Friday, January 13, 2012

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Founder of Non-Profit Pleads Guilty to Felony Charge
In Investigation Involving Misuse of $392,000 in Grant Money
- Admits Covering Up Activities by Former Council Member Harry L. Thomas, Jr. -

     WASHINGTON - Marshall D. Banks, the founder of a non-profit organization that operated youth programs in the District of Columbia, pled guilty today to a felony charge stemming from his failure to report and effort to conceal the misappropriation of $392,000 in government grants.

     The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr.; James W. McJunkin, Assistant Director in Charge of the FBI Washington Field Office, and Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).

     Banks, 71, of Washington, D.C., pled guilty in the U.S. District Court for the District of Columbia to a criminal Information charging him with one count of misprision of a felony (theft or bribery concerning programs receiving federal funds). As part of the plea agreement, Banks agreed to cooperate in any criminal investigation or prosecution.

     Today’s plea comes one week after the guilty plea of former District of Columbia Council member Harry L. Thomas, Jr., on charges that also involve the grant money.

     A sentencing date has not yet been set. The Honorable John D. Bates scheduled a status hearing for May 25, 2012. The charge carries a maximum penalty of three years in prison, as well as a possible fine and an order to make restitution. Under federal sentencing guidelines, the parties have agreed that the applicable range would be a maximum of six months of incarceration and a fine of up to $5,000. Also, as part of the plea agreement, Banks agreed to be jointly and severally liable with others responsible for the crimes for paying $392,000 in restitution to victims of his conduct.

     “Public corruption is allowed to flourish when ordinary citizens remain silent in the face of obvious wrongdoing,” said U.S. Attorney Machen. “While Harry Thomas lined his pockets with money meant to benefit children, he was unable to do so alone. Marshall Banks stood by while Thomas stole the money and instead of reporting it, actively helped to conceal the fact that grant funds were being funneled back to Thomas. Today's guilty plea underscores the importance of standing up and speaking out against public officials who are on the take.”

     “By concealing and failing to report the illegal use of public funds, Mr. Banks allowed for money to be stolen from its intended use for the youth programs in the District of Columbia,” said Assistant Director McJunkin. “Such illegal behavior is unacceptable, and those who commit such acts will be held accountable. We urge anyone with information about corruption to come forward and contact the FBI."

     “IRS-Criminal Investigation pulls the skills of each agency to make a formidable team as we investigate allegations of wrongdoing,” said Acting Special Agent in Charge Hylton. “Today’s actions demonstrate our collective efforts to enforce the law and ensure public trust.”

     According to a statement of offense signed by the government as well as the defendant, Banks was the founder and director of the Langston in the 21st Century Foundation (Langston 21), a non-profit organization that operated youth activities designed to foster educational advancement, including programs at Langston Golf Course in the District of Columbia.

     Through his responsibilities at Langston 21, he worked with James Garvin, a board member for Langston 21 and the general manager of the golf course.

     The statement of offense says that Thomas, the District of Columbia Council member who represented Ward 5, informed Garvin in 2007 that he wanted to obtain grant funds to conduct activities in the ward. Thomas informed Garvin that Thomas needed a non-profit organization to act as the recipient of the money. Thomas also stated that a portion of the funds could be dedicated to youth programs at Langston Golf Course.

     At Thomas’s request, Garvin asked Banks whether Langston 21 would serve as the non-profit needed by Thomas to receive the grant funds and forward money to Thomas. Banks agreed. Langton 21 then executed a grant agreement for $392,000 with a non-profit public-private partnership that got funding from the District government.

     Thomas told Garvin that Team Thomas, an organization he controlled, would be a suitable organization to carry out the grant. However, neither Thomas or Team Thomas were mentioned in the agreement with the public-private partnership.

     In January, May, October and December of 2008, the public-private partnership issued quarterly grant payments to Langston 21. At or about the time of each check, Thomas directed Garvin or Banks to have Langston 21 issue checks to either Team Thomas or another organization, HLT Development, that Thomas also controlled.

     Langston 21 received $392,000 in grant funds from the public-private partnership. From that grant money, Garvin and Banks issued checks to Team Thomas and HLT totaling $306,000.

     Banks knew that the documentation used for the grants contained false representations.

     In addition, Banks knew that no D.C. youth were brought to the Langston golf course by Thomas to participate in grant-related activities. Sometime before October 2008, Banks determined that Thomas was not using the grant funds for their designated purposes. Yet he continued to deposit grant funds into Langton 21's bank account and then write checks to Team Thomas and HLT with the term “youth sports” or “learning center” on the memo lines.

     Banks did not report the improprieties to authorities, even though he knew Thomas was using money for his personal benefit, and he helped Thomas conceal his actions.

     Thomas, 51, pled guilty on January 6, 2012 in the U.S. District Court for the District of Columbia to a criminal Information charging him with one count of theft concerning programs receiving federal funds and one count of filing a false tax return. As part of the plea agreement, he agreed to submit his resignation from the District of Columbia Council. Thomas is to be sentenced by Judge Bates on May 3, 2012. The investigation is continuing.

     In announcing the plea, U.S. Attorney Machen, Assistant Director McJunkin, and Acting Special Agent in Charge Hylton commended the work of those who investigated the case for the FBI and IRS-CI.

     They also acknowledged the efforts of Assistant U.S. Attorneys Jonathan W. Haray, Courtney G. Saleski, Bridget M. Fitzpatrick, Ellen Chubin Epstein and Matthew Graves of the Fraud and Public Corruption Section in the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney Peter Mason of the Public Integrity Section of the Department of Justice’s Criminal Division, who have prosecuted the case.

     Finally, they expressed appreciation to Criminal Investigators Matthew Kutz, Mark Crawford and Melissa Matthews; Paralegal Specialists Tasha Harris, Diane Hayes, Sarah Reis, Shanna Hays, Lenissa Edloe and Monica Johnson; Legal Assistants Jared Forney and Krishawn Graham, and Litigation Technology Specialist Tracy Van Atta, all of the U.S. Attorney’s Office.





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