Former Business Executive Indicted on Federal Charges, Accused of Engaging in Contract Kickbacks and Phony Billing Schemes
Defendant Allegedly Received More Than $700,000 From Criminal Activities
WASHINGTON – John T. Fitzgerald, a former vice president of the Washington, D.C. office of an investment banking firm, was indicted today on federal charges stemming from a scheme in which he allegedly accepted kickbacks for construction management contracts he steered to another firm, as well as other allegedly fraudulent activities.
The indictment was announced by U.S. Attorney Channing D. Phillips, Andrew Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and Kimberly Lappin, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Washington, D.C. Field Office.
Fitzgerald, 48, of Washington, D.C., was indicted by a grand jury in the U.S. District Court for the District of Columbia on 13 felony charges. They include three counts of wire fraud; one count of aggravated identity theft; two counts of tax evasion, and seven counts of money laundering. The indictment also includes a forfeiture allegation seeking more than $700,000 in proceeds that can be traced to the alleged schemes.
A co-defendant, Bryan D. Wright, 54, of Laytonsville, Md., pled guilty in February 2016 to one count of conspiracy to engage in wire fraud and one count of conspiracy to engage in money laundering. He is awaiting sentencing.
According to the indictment, Fitzgerald began work at the investment banking firm in 2008 and oversaw its real estate development activities and investments. His responsibilities included oversight of a commercial development project in Hanover, Md., known as the Station Ridge development project. The investment banking firm was the managing investor-owner of the project, which ultimately included three buildings for use as offices by various tenants.
In or around mid-2011, according to the indictment, Fitzgerald began to invoice the general contractor on Station Ridge through a company Fitzgerald owned, and thereby obtained roughly $41,000 for himself on the project.
Later in 2011, according to the indictment, Fitzgerald installed Wright as construction manager on Station Ridge, and the two agreed to an invoicing and kickback scheme that lasted into 2013. Wright was president of P&E Services, LLC. Between 2011 and 2013, through their scheme, Wright and Fitzgerald allegedly took $769,000 from the investment banking firm employing Fitzgerald, and another $417,000 from the general contracting company (which was reimbursed by the investment banking firm), for a total of nearly $1.2 million. Wright, through P&E and other companies, paid Fitzgerald nearly $600,000 in proceeds from the Station Ridge project, roughly half of the total amount that P&E Services obtained, the indictment alleges.
In a related scheme involving purported projects on the Bridgewater office building in Fairfax, Va., which was another development project of the investment banking firm, Wright and Fitzgerald submitted invoices for work that was not completed, and obtained additional money from Fitzgerald’s employer. Once again, Fitzgerald and Wright split the proceeds between them, with Fitzgerald receiving approximately $70,000, the indictment alleges.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
In announcing the indictment, U.S. Attorney Phillips, Assistant Director in Charge Vale, and Special Agent in Charge Lappin commended the work of those who investigated the case from the FBI’s Washington Field Office and the Internal Revenue Service-Criminal Investigation. They acknowledged the work of those who handled the case for the U.S. Attorney’s Office, including former Assistant U.S. Attorney David A. Last, Paralegal Specialists Tasha Harris and C. Rosalind Pressley, and Legal Assistants Angela Lawrence and John Lowell. Finally, they acknowledged the work of Assistant U.S. Attorneys John Marston, Kendra D. Briggs, and Zia Faruqui, who are investigating and prosecuting the matter.