Former President of Financial Services Firm Sentenced to Prison for Investment Fraud Scheme

RICHMOND, Va. – James E. Dunivan, Jr., 52, of Powhatan, was sentenced today to 27 months in prison for wire fraud.  Dunivan was also ordered to pay $500,000 in restitution to victims of the offense.

Dunivan pleaded guilty on January 15.  According to court documents, Dunivan was formerly the president of Virginia Financial Associates, Inc., an insurance and investment firm located in Richmond.  Between May 2012 and January 2015, Dunivan engaged in a scheme to defraud two investors by convincing both to invest in two separate limited liability companies (LLCs). Dunivan represented to one investor that an LLC established by Dunivan would operate a hedge fund, and that the investor’s money would be used as capital to establish, market, and operate the hedge fund.  Between May 2012 and July 2013, the investor provided Dunivan with $425,000 for investment in the hedge fund.  Instead of using the investor’s money for the promised purposes, Dunivan used the funds to pay for personal and lifestyle expenses—including mortgage payments for his personal residence and over $20,000 in private school tuition—and to make interest payments owed to the investor and others related to separate investments.  Between September 2014 and January 2015, Dunivan then solicited money from a second investor, representing to that investor that an LLC established by Dunivan would function as a proprietary trading firm, and that the investor’s money would be used to trade futures.  After initially obtaining $50,000 from the investor, Dunivan then told the investor that the investor’s capital account had increased due to trading gains, causing the investor to invest another $25,000.  In fact, Dunivan used most of the investor’s money for his own personal expenses.  

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Douglas F. Mease, Special Agent in Charge of the U.S. Secret Service’s Richmond Field Office, made the announcement after sentencing by Senior U.S. District Judge James R. Spencer.  Assistant U.S. Attorney Dominick S. Gerace prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-202.