Owner of Chesapeake Barber College Sentenced for $4.5 Million GI Bill Fraud

NORFOLK, Va. – William E. Grobes, IV, 45, of Chesapeake, was sentenced today to 63 months in prison, followed by three years of supervised release, for charges of conspiring to commit wire fraud and money laundering. Grobes was also ordered to pay over $4.5 million in restitution.

Grobes pleaded guilty on Nov. 30, 2016. According to court documents, Grobes owns the College of Beauty and Barber Culture (CBBC), located in Chesapeake. CBBC was purportedly a barber and cosmetology school approved by the Department of Veterans Affairs (VA) to provide education and training to military veterans, including veterans who received tuition assistance under the Post-9/11 GI Bill. Grobes represented to the VA that CBBC provided full-time schooling to hundreds of veteran students beginning in October 2011. In reality, the school was a sham. Most veterans enrolled in CBBC courses received few, if any, hours of instruction from CBBC employees, and there were no tests, exams, or practical exercises given. Rather, students were directed to simply sign in and out of the school each day so that Grobes could report to the VA that they were enrolled and attending. In exchange, CBBC received Post-9/11 GI Bill tuition payments for each veteran from the VA.

Based on Grobes’ provision of false information to the VA concerning the number of hours of instruction and the manner and quality of the instruction provided to veteran students, CBBC received over $4.5 million in Post-9/11 GI Bill tuition payments between October 2011 and September 2016.

Grobes has agreed to forfeit his home, six bank accounts totaling over $1 million, and nearly $200,000 in cash seized from a safe in the floor of his home. Grobes’ wife and co-conspirator, Katherine Grobes, is scheduled to be sentenced on Friday, March 10.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Michael J. Missal, Inspector General, U.S. Department of Veterans Affairs, Office of Inspector General; Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); and Maureen Evans, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, made the announcement after sentencing by Chief U.S. District Judge Rebecca Beach Smith. Assistant U.S. Attorney V. Kathleen Dougherty is prosecuting 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. 2:16-cr-154.