Former Landover Company Employee Admits to Fraudulently Obtaining Business Expenses for Fictitious Client Development
Caused His Employer to Believe Demand for its Services Was Growing Exponentially; Employer Stopped Pursuing New Contracts, Sought Larger Lines of Credit and Hired New Employees
Greenbelt, Maryland – James Charlton Davis, III, age 57, of Anderson, South Carolina, pleaded guilty today to wire fraud arising from an elaborate scheme to defraud his employer of at least $240,000.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.
According to his plea agreement, from May 7, 2012 to March 13, 2013, Davis was the director of the electrical division for a small company in Landover, Maryland that provided construction and preconstruction services to federal agencies. When applying for his job, Davis falsely represented that he had earned a Ph.D. from the Massachusetts Institute of Technology (MIT), when in fact Davis had not attended MIT. Part of his duties as director was to develop new business for the company.
Davis falsely told company executives that he knew executives at several corporate entities, and that he was pursuing contracts with these corporate entities. Davis created and falsely registered online domain names that closely resembled legitimate domain names associated with several of these corporate entities. Davis used these falsely-registered domains to send emails to himself and others at his employer to legitimize the fictional contracts he claimed to obtain on his employer’s behalf. Davis also assumed the identity of an individual who investigation revealed was a contractor with a technology company. Davis had previous interactions with this individual during his previous employment.
In July 2012, Davis told his employer that he had procured contracts with the technology company, headquartered in San Jose, California, to construct cell towers in Alpharetta, Georgia. Davis communicated with himself via email using the stolen identity of the individual, in connection with fictitious contracts with the tech company, and with other corporate entities for supposed upgrades to their data centers. Davis represented that he was working with this individual to perform these contracts. For several of the contracts, Davis sent communications to himself and/or others at his employer, or caused others at his employer’s company to send emails to various personas he had created—some of whom appear to refer to actual employees of the corporate entities with whom Davis claimed to be negotiating contracts.
Related to his supposed efforts to obtain and perform contracts with these corporate entities, Davis traveled extensively and incurred bills for expensive dinners and accommodations. Davis sought and obtained reimbursement from his employer for travel, meals, equipment and labor costs. In fact, however, Davis did not pursue any legitimate business and did not have interactions with any of these corporate entities on behalf of his employer.
Because of Davis’s fraudulent emails, his employer believed that demand for its services had grown exponentially. As a result, his employer stopped pursuing additional contracts, sought larger lines of credit and hired additional personnel.
In March of 2013, his employer learned of the fraud scheme when none of the invoices being submitted to these corporate “clients” - the fictional contacts at these companies - were being paid. Davis’s employer started contacting these “clients” independently, and they all confirmed that they had no business dealings with Davis’s employer or with Davis.
Davis has agreed to forfeit and pay restitution of $240,000, the minimum amount of loss to his employer company.
Davis and the government have agreed that if the Court accepts the plea agreement, Davis will be sentenced to between 57 months and seven years in prison. U.S. District Judge Theodore D. Chuang has scheduled sentencing for June 2, 2016 at 2:00 p.m.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorneys Thomas M. Sullivan and Ray D. McKenzie, who are prosecuting the case.