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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Louisiana

FOR IMMEDIATE RELEASE
Tuesday, June 22, 2021

Ex-White House Military Aide and Maryland Businessman Sentenced to Over 8 Years in Prison for Operating Fraudulent Eb-5 Visa Scheme

NEW ORLEANS – U.S. Attorney Duane A. Evans announced that businessman WILLIAM B. “BART” HUNGERFORD, JR., age 60, of Maryland, and ex-White House military aide and former U.S. Air Force colonel TIMOTHY O. MILBRATH, age 65, also of Maryland, were sentenced today for running a scheme to defraud investors during defendants’ operation of the New Orleans EB-5 Regional Center after Hurricane Katrina.  U.S. District Judge Greg G. Guidry sentenced HUNGERFORD and MILBRATH each to 102 months in prison.  

After a three-week trial before Judge Guidry that concluded in September 2019, a federal jury found HUNGERFORD and MILBRATH guilty on all counts of the superseding indictment. Although trial was completed in September 2019, an in-person sentencing could not be held due to the COVID-19 pandemic. The charges stemmed from the defendants’ exploitation of the U.S. Citizenship and Immigration Services’ (USCIS) EB-5 visa program. Congress created this program to bring investment into the United States and to create American jobs. The visa program permits immigrants to invest a minimum of $1,000,000.00 in a United States job-creating enterprise and obtain permanent residency if, after two years, that investment created or preserved ten American jobs.  The minimum investment required was lowered to $500,000.00 if the investment was made in a targeted employment area (“TEA”), defined as an area with an unemployment rate of 150% of the national average.

The evidence at trial established that HUNGERFORD and MILBRATH formed NobleOutReach, LLC, to operate an EB-5 investment fund.  The defendants then persuaded the City of New Orleans to allow their company to run the City’s EB-5 regional center. Because New Orleans was a designated TEA in the years after Hurricane Katrina, immigrant investors only had to invest $500,000.00 in order to qualify under the EB-5 visa program.  HUNGERFORD and MILBRATH represented to investors that their $500,000.00 investment would be used to create jobs in New Orleans and contribute to the rebuilding of the City.  A total of 31 immigrants invested a total of $15.5 million in the defendants’ investment fund.  These immigrants also paid thousands of dollars in addition as “service fees” to the defendants. Along with another non-immigrant investor who also invested with the defendants, HUNGERFORD and MILBRATH obtained a total of $18,070,000.00 from investors.

However, instead of investing these funds into New Orleans-based job-creating enterprises, HUNGERFORD and MILBRATH fraudulently misappropriated investor funds for their own personal gain.  HUNGERFORD and MILBRATH wrote themselves checks drawn from investor funds which they disguised as “loans” or “loan repayments.”  The evidence showed that the defendants created multiple companies in order to conceal the path of investor funds and misappropriate them.  The defendants also spent investor funds to purchase vacation and rental properties for their own benefit.  During the perpetration of the fraud, the defendants made false representations to investors, USCIS, and the City of New Orleans.

Judge Guidry sentenced the defendants to 102 months as to each Count 1 (conspiracy to commit wire fraud), Count 3 (conspiracy to commit money laundering), and Counts 4 through 9 (wire fraud). As to Count 2, conspiracy to commit immigration fraud, Judge Guidry sentenced the defendants to the statutory maximum of 60 months in prison. He also sentenced HUNGERFORD and MILBRATH each to two years of supervised release. Judge Guidry agreed to take the Government’s motions for restitution and for a preliminary order of forfeiture under submission to be determined at a later date.

“USCIS places the highest priority on ensuring that every program we manage, including the EB-5 program, is administered with fairness and integrity,” said USCIS Acting Director Tracy Renaud. “We are grateful to our many law enforcement partners who helped to deliver justice in this case and uphold the integrity of the EB-5 program.”

“Today’s sentence sends a clear message to criminals who commit fraud against anyone, including aspiring U.S. citizens, that they will be held accountable. The economic crimes committed by Timothy Milbrath and William "Bart" Hungerford are most egregious and grossly impacted the New Orleans economy and investors hopeful of the American dream. The FBI is committed to rooting out and aggressively pursuing dishonest businesspeople like Hungerford and Milbrath,” said Special Agent in Charge Douglas Williams, Jr. "I would like to thank the U.S. Attorney’s Office, and US Citizenship and Immigration Service (USCIS) for the tremendous effort and work put forth in this investigation." 

“This was a very detailed and complex case with many moving parts, but it in the end, it ultimately all comes down to greed. This elaborate scheme to defraud our community, taxpayers and those lawfully seeking permanent residency in the United States, occurred in the wake of one of the most tumultuous times in our city’s history, which makes this crime more egregious. Attempts by perpetrators to conduct fraudulent schemes will not be tolerated,” stated U.S. Attorney Duane A. Evans.

U.S. Attorney Evans praised the work of the Federal Bureau of Investigation’s New Orleans Field Office. U.S. Attorney Evans also thanked U.S. Citizenship and Immigration Services for their assistance in prosecuting this case. The case was prosecuted by Assistant U.S. Attorneys Matthew R. Payne, Shirin Hakimzadeh, Maria M. Carboni, and Andre J. Lagarde. 

 

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Topic(s): 
Financial Fraud
Updated June 22, 2021