Richmond Man Sentenced for Massive Tax Fraud and Obstruction Of Justice
Attempted to hide millions and used his brother’s identity while trying to flee the United States
RICHMOND, Va. – Billy Gene Jefferson, Jr., 52, of Richmond, was sentenced today to 20 years in prison for engaging in a nearly $13 million tax fraud scheme involving the rehabilitation of historic properties in Richmond, trying to hide and spend millions in ill-gotten gains to avoid paying back his victims after he was charged and pleaded guilty in federal court, and stealing his brother’s identity and trying to flee the country to avoid justice.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; Gary Barksdale, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; and Colonel W. Steven Flaherty, Virginia State Police Superintendent, made the announcement after the sentence was handed down by U.S. District Judge John A. Gibney, Jr.
On Dec. 19, 2013, Jefferson pleaded guilty to conducting a major fraud against the United States and engaging in unlawful monetary transactions for his role in orchestrating a multimillion dollar rehabilitation tax credit scheme between 2009 and 2012. During that time, Jefferson applied for and received millions in state and federal historic tax credits in connection with the rehabilitation of a former tobacco manufacturing plant in the Manchester Industrial Historic District of Richmond (referred to as the TABAC Project), followed by the rehabilitation of ten historic buildings located in the Fan District of Richmond (referred to as the River City Renaissance Projects). Jefferson then sold many of those tax credits to corporate investors. However, Jefferson grossly inflated the rehabilitation costs on the properties at issue, and as a result, he fraudulently obtained millions in state and federal tax credits. The loss in federal tax credits was $5,754,616, and the loss in state credits was $7,193,270, for a combined total of approximately $12,947,886.
After Jefferson pleaded guilty on Dec. 19, 2013, he was released on bond, allowing him to gather funds to repay his victims before sentencing. While awaiting sentencing, however, law enforcement discovered Jefferson was stealing and spending funds that could have been used to repay his victims, including orchestrating hundreds of covert transactions designed to spend and conceal over $7 million. At a hearing held on September 9, 2014, the United States presented evidence that Jefferson had illegally amassed up to $2.5 million for a cash hoard, stole over $2.15 million in assets during a month-long trip to Las Vegas, and opened a new bank account and conducted several financial transactions to evade a pretrial release bond requirement to report any transactions over $25,000 to the IRS. Investigators also discovered that Jefferson had created a PVC pipe vault designed to hold his cash hoard. After his arrest, Jefferson asked a friend to throw the pipe away. Instead, on Feb. 28, 2014, the friend led FBI and U.S. Postal Inspection Service investigators to the empty pipe which was later presented as evidence against the defendant.
In addition to hiding and spending down his assets, Jefferson engaged in a thwarted attempt to flee the United States to avoid sentencing and further prosecution. As part of this effort, Jefferson created a false Arkansas driver’s license in the name of his brother, but with a picture of himself, and Jefferson then used the false ID while attempting to charter a one-way flight to Cranfield, England. Jefferson later pleaded guilty on June 4, 2014, to unlawfully transferring a false identification document and aggravated identity theft for using his brother’s identity.
Judge Gibney consolidated both cases for today’s sentencing hearing. As part of his plea agreement, Jefferson has agreed to pay full restitution for the tax credit scheme, which could range between $9.6 million up to $12.9 million. Due to issues in identifying the final amount of restitution and the victims, the court continued the restitution hearing for 60 days.
This case was investigated by IRS-CI, FBI’s Richmond Field Office, U.S. Postal Inspection Service, and Virginia State Police, with assistance from the Virginia Department of Historic Resources. Assistant U.S. Attorneys Michael Gill and Wingate Grant and Senior Assistant Attorney General and Special Assistant United States Attorney Patrick Dorgan Patrick Dorgan are prosecuting the case on behalf of the United States.
This investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is comprised of several federal and state agencies, including the Virginia Attorney General’s Office, and it also serves as an investigative arm of the President’s Financial Fraud Enforcement Task Force (FFETF), an interagency national task force. For more information on FFETF, visit www.stopfraud.gov.
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 Nos. 3:13CR212 and 3:14CR066.