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Wednesday, January 18, 2012

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Second Leader of Non-Profit Pleads Guilty to Felony Charge
In Investigation Involving Misuse of $392,000 in Grant Money
- Helped Conceal Activities of Former Council Member Harry L. Thomas, Jr.

     WASHINGTON - James Garvin, a board member of a non-profit organization that operated youth programs in the District of Columbia, pled guilty today to a felony charge for failing to report and concealing 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’s 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).

     Garvin, 55, of Upper Marlboro, Md., 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, Garvin agreed to cooperate in any criminal investigation or prosecution.

     The founder of the non-profit, Marshall D. Banks, pled guilty on January 13, 2012 to the same charge. In addition, former District of Columbia Council member Harry L. Thomas, Jr., pled guilty on January 6, 2012 to federal theft and tax 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. Garvin also has agreed to be jointly and severally liable with Banks and Thomas for paying restitution to victims of the illegal conduct.

     “District residents will not tolerate corrupt public officials or those, such as James Garvin, who enable corrupt activity to prosper,” said U.S. Attorney Machen. “Today’s guilty plea is a sobering reminder that we all have a responsibility to stand up against corruption and that there are grave consequences for those who help public officials steal from taxpayers.”

     “Mr. Garvin participated in this public corruption scheme by concealing the theft of money from the citizens of the District of Columbia,” said Assistant Director in Charge McJunkin. “Today's guilty plea demonstrates that those who commit corruption, as well as those who allow it, will be held accountable for their actions.”

     According to a statement of offense signed by the government and the defendant, Garvin is the general manager of the Langston Golf Course in Northeast Washington, as well as a board member of the Langston in the 21st Century Foundation (Langston 21), a non-profit organization.

     Langston 21 operated youth activities designed to foster educational advancement, including programs at Langston Golf Course, which is located in Ward 5 of the District of Columbia. Garvin worked with Banks, the founder and director of the organization.

     Thomas, 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. Langston 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, which was for youth programs. However, neither Thomas or Team Thomas was 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 to fund youth sports activities. 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.

     In January 2008, a member of Thomas’s staff, acting on the Council member’s behalf, e-mailed budget paperwork for the grant to Garvin and an employee of the public-private partnership, as part of the process for the approval of funds to Langston 21. The budget paperwork contained false representations. Based on his review of this paperwork, and from other interactions with Thomas, Garvin determined in or about January 2008 that the grant agreement proposed by Thomas was not legitimate, and that Thomas intended to misappropriate for his personal benefit at least some of the money that would be passed through Langston 21.

     At the time of the other payments, in May, October and December of 2008, Garvin did not believe that youth sporting events had been conducted to justify the distribution of the grant funds. Yet he, along with Banks, participated in the grant process and thereby concealed Thomas’s misappropriation of funds.

     Like Banks, Garvin did not report the improprieties to authorities. By continuing to obtain and receive grant payments, redistribute funds to Team Thomas and HLT, and otherwise participate in the scheme, Garvin and Banks helped to conceal Thomas’s actions.

     Thomas, 51, pled guilty 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.

     Banks, 71, of Washington, D.C., is to appear in court for a status hearing on May 25, 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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