Former Head Of Youth-Oriented Non-Profit Pleads Guilty To Tax Charge Involving $110,000 Grant That Funded An Inaugural BallPlea Is Part Of The Investigation That Led To Conviction Of Former District Of Columbia Council Member Harry L. Thomas, Jr.
WASHINGTON – Millicent D. West, the former director and chief executive officer of a non-profit organization that promotes youth opportunities, pled guilty today to a criminal tax charge for her role in channeling $110,000 in youth grant funds used to pay for an inaugural ball.
The guilty plea, which took place in the U.S. District Court for the District of Columbia, was announced by U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation.
West, 43, pled guilty to a charge of attempting to interfere with the administration of the Internal Revenue Service laws. The Honorable John D. Bates scheduled sentencing for May 24, 2013. The charge carries a maximum statutory sentence of three years in prison and a fine of up to $250,000. Under federal sentencing guidelines, the parties have agreed that the likely range is six months to 12 months of incarceration and a fine of $2,000 to $20,000.
West is the fifth person to plead guilty to charges in an ongoing investigation into activities involving former District of Columbia Council Member Harry L. Thomas, Jr. Thomas pled guilty last year to charges stemming from a scheme in which he used more than $350,000 in taxpayers’ money that was earmarked for the arts, youth recreation, and summer programs for his own personal benefit, including to pay for vehicles, clothing and trips. He resigned as a condition of his plea agreement and is now serving a 38-month prison sentence.
The others who have pled guilty include James Garvin and Marshall D. Banks, leaders of one of the non-profits used in the scheme. Both men, from the Langston in the 21st Century Foundation, pled guilty to misprision of a felony, a charge holding them accountable for failing to report and concealing the misappropriation of $392,000 in government grants. Additionally, Danita C. Doleman, the president of Youth Technology Institute, pled guilty to filing a false return in connection with her assistance in funneling public money to pay for the 51st State Inaugural Ball. Garvin, Banks and Doleman are awaiting sentencing.
According to the government’s evidence, West’s conduct covered up the actual beneficiaries of the youth grant funds and later led to the filing of false and misleading tax forms.
“Millicent West was by all accounts a dedicated public servant who was truly committed to the mission of serving young people in the District of Columbia,” said U.S. Attorney Machen. “Unfortunately, as we have seen too many times, she agreed to break the law to appease a crooked public official who was intent on carrying out a criminal scheme. As a result, she allowed more than $100,000 intended to keep D.C. kids off drugs to be used to throw a party for adults. This prosecution underscores the importance of standing up to corruption rather than becoming complicit in it. We hope that this guilty plea allows Ms. West to put this mistake behind her and return to doing good works. We also hope that it reminds other public servants and government employees not to jeopardize their careers by facilitating politicians’ wrongdoing.”
“By concealing and failing to report the illegal use of public funds, Ms. West allowed money to be diverted away from programs that supported the youth of our city,” said Assistant Director in Charge Parlave. “Her guilty plea today demonstrates that those who commit corruption, as well as those who allow it, will be held accountable for their actions.”
“Federal grant funds entrusted to a non-profit and subsequently diverted to an ineligible entity is fraudulent,” said Special Agent in Charge Kelly. “Ms. West’s attempts to defraud the government, interfere with the administration of Internal Revenue laws and disguise the true nature of funds earmarked for a tax exempt entity failed. Today’s plea confirms the commitment of IRS-Criminal Investigation, along with its law enforcement partners, to the American public that we are poised and prepared to investigate any financial scheme to defraud the American taxpayer.”
According to a statement of offense, signed by the defendant as well as the government, from in or about July 2008 to in or about October 2009, West was the director and chief executive officer of a non-profit public-private partnership that provided resources and developed programs to benefit children and youth in the District of Columbia. The partnership was primarily funded by the District of Columbia government through funds designated by the Mayor and Council for particular youth-related purposes. The partnership provided grants to organizations for programs tailored for children and youth.
Thomas, who took office in January 2007 as the Ward 5 representative, served during his first term as Chair of the Council’s Committee on Libraries, Parks, Recreation and Planning, which involved oversight responsibility for the D.C. Department of Parks and Recreation. In that role, he worked with the non-profit public-private partnership. Also, an individual identified as “Staff Member 1” worked on the Thomas’s staff and served as Director of the Committee.
Thomas was closely involved in the planning of the 51st State Inaugural Ball, held on Jan. 20, 2009 in the Wilson Building. It was a formal, black-tie event open to members of the public who had purchased tickets. But ticket sales and other contributions did not generate nearly enough money to cover costs of the event.
Several days after the event, West was contacted for the first time about the 51st State Inaugural Ball and told that organizers had not collected enough funds to pay for it. According to West, Thomas told her that youth had been able to attend the event to honor the historic inauguration of President Obama. West believed that the event served the partnership’s target population.
On Jan. 29, 2009, “Staff Member 1” submitted budget paperwork to the public-private partnership seeking a grant of $110,000 for a political organization that would fund a “youth/young adult inauguration celebration.” “Staff Member 1” also identified a potential funding source: the Drug Prevention/Children at Risk Fund, a separate fund established to raise money for programs that prevented drug and alcohol consumption and supported youth who had direct or indirect contact with drugs. The D.C. Council agreed in 2008 to transfer the administration of this fund to the public-private partnership, but had not yet done so.
West told “Staff Member 1” that the public-private partnership would move to fund the grant request for the Inaugural Ball once it got the money from the drug prevention fund. The plan hit an obstacle, however, when an employee of the public-private partnership expressed concern about the legality of granting money to a political organization.
Thomas subsequently directed “Staff Member 1” to change the grant recipient to the Youth Technology Institute, another non-profit, and new paperwork was submitted. On Feb. 5, 2009, West directed that the check be issued, with the money coming from the drug prevention fund.
In truth, after the grant was issued, the Youth Technology Institute immediately forwarded nearly the entire amount to the political organization, which paid expenses from the 51st State Inaugural Ball. West learned that this took place at a later date.
At all times, West viewed the ball as an event that was organized and sponsored by Council member Thomas. She failed to consider which individuals or organizations were responsible for the ball’s debts. Additionally, she caused the records maintained by the public-private partnership to inaccurately and falsely show that the $110,000 grant was given to an organization that was a tax-exempt entity. This resulted in a failure to report to the IRS that the ultimate beneficiaries of the grant funds included ineligible recipients.
West resigned from the partnership in October 2009 to become the District of Columbia’s director of homeland security and emergency management. The following year, the public-private partnership filed its tax forms with the Internal Revenue Service, listing the $110,000 grant as going to Youth Tech for “funding to provide programming for children and youth,” instead of providing the accurate accounting.
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director in Charge Parlave and Special Agent in Charge Kelly praised the work of the investigators from the FBI’s Washington Field Office and IRS-CI who worked on the case. They also acknowledged the efforts of those who worked on the case form the U.S. Attorney’s Office, including Criminal Investigators Matthew Kutz, Mark Crawford and Melissa Matthews; Paralegal Specialists Tasha Harris, Diane Hayes, Shanna Hays, Lenisse Edloe and Monica Johnson; Legal Assistant Krishawn Graham, and former Assistant U.S. Attorney Bridget Fitzpatrick. Finally, they commended the work of Assistant U.S. Attorneys Jonathan W. Haray, David Johnson, and James E. Smith, who are prosecuting the matter.13-063