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Press Release

Founders of Film School for Wounded Veterans Sentenced to Prison

For Immediate Release
U.S. Attorney's Office, Southern District of California

Assistant U.S. Attorneys Eric J. Beste (619-546-6695) and Rebecca S. Kanter (619-546-7304)


SAN DIEGO – Judith Paixao and Kevin Lombard, a husband and wife who embezzled federal funds from the Wounded Marine Careers Foundation that were intended to provide job training, benefits and equipment for injured Marines returning from Iraq and Afghanistan were sentenced today, following a July 2015 jury trial.

Paixao was sentenced to six months’ custody and six months’ home confinement; her husband, Lombard, was sentenced to three months’ custody followed by three months’ home confinement.  In addition to these custodial sentences, the Court ordered the defendants to pay $150,000 in financial penalties and restitution.

At the hearing, Judge Jeffrey T. Miller, the district court judge who presided over the trial and imposed the sentences, denied the defendants motion for a new trial or judgment of acquittal.  In doing so, Judge Miller observed that “whatever commendable vision served to launch the Foundation, that idealism spawned theft, embezzlement and worse.” He noted that there were several “tells,” i.e. facts which created the “lens through which the jury viewed the evidence in this case.” These “tells” included their continuous misrepresentations of donating hundreds of thousands of dollars to the Foundation from the sale of their home, which they actually had lost to foreclosure. Another “tell” related to the defendants’ misrepresentations regarding high-end video cameras acquired by the Foundation and billed to the Department of Veterans Affairs (“VA”)  at “bogus” inflated costs.

From 2007-2009, Paixao and Lombard were directors of the Wounded Marine Careers Foundation (“the Foundation”), a tax-exempt entity that trained injured veterans for careers in the film industry. They used the Foundation to defraud the VA and submit false claims to the VA in order to get funds for training and equipment they never provided. Adding insult to injury, the defendants also embezzled funds from the Foundation for their own use.

As detailed in their trial, the defendants made numerous false and misleading statements to the VA in order to obtain funds for training and equipment, and then did not provide all the training or equipment to the veterans. Although the defendants claimed to have donated over $200,000 to start the Foundation, they ended up taking over $400,000 from the Foundation’s accounts over the course of two years.

Rather than paying the Foundation’s creditors (some of whom were members of the Foundation’s Board of Directors), the defendants transferred funds to their own personal credit cards and bank accounts. Although some of this money went to repay expenses they had fronted to the Foundation, evidence presented at trial showed that the defendants ended up taking over $100,000 for themselves. The defendants then used these funds to pay for a variety of personal expenses, including a family vacation in Bermuda; cell phone bills, car insurance and gifts for their family members; prescription medications and counseling costs; wine and dinners for two; and the costs of a New Year’s Day sailing trip around San Diego Bay.

U.S. Attorney Laura Duffy emphasized that “the fraud committed by these defendants - who used money set aside to help wounded veterans and spent it on themselves - was particularly offensive. These defendants capitalized on the misfortune of wounded marines in their time of vulnerability and took advantage of the VA’s commitment to serving wounded veterans to defraud the VA and enrich themselves. War profiteering which takes advantage of our veterans is not in any way, shape or form acceptable.”

The defendants routinely commingled the finances of the Foundation with their personal finances, thereby obstructing the ability of the Internal Revenue Service to monitor the Foundation’s tax-exempt status and determine the defendants’ personal income tax liability.

Among the witnesses who testified at trial were three of the injured veterans who used their vocational rehabilitation benefits to participate in the first training class: Gunnery Sergeant Nick Popaditch and Lance Corporal Joshua Frey. Lance Corporal Frey, who had previously been quoted in a favorable New York Times article, testified at trial that after the article was published the defendants did not give him all the equipment he was promised, and failed to provide him with certain training and job placement.

The trial evidence also showed that Defendant Paixao defrauded the Bob Woodruff Foundation in connection with a restricted grant of almost $100,000 by concealing the fact that one of the intended recipients – a Marine who had been injured in Fallujah – had left the program. Instead of notifying the Bob Woodruff Foundation and asking for a reallocation of the funds, Ms. Paixao took the grant money and used it for other purposes.

In explaining the reason for imposing custodial sentences well below the advisory sentencing guideline range, Judge Miller identified the unique characteristics of each defendant, including their extraordinary community support (including from many members of the military), the low risk of recidivism, and the court’s assessment that the defendants “began with a vision or goal that was worthy” when they first reached out to wounded Marines.  Despite these mitigating factors, the Court observed that the defendants “deserved to be prosecuted,” and this case served as important deterrent against those who would be tempted to victimize charitable institutions, their donors or their beneficiaries.

Douglas J. Carver, Special Agent in Charge, VA OIG Western Region stated, “Fraud schemes capitalizing on the misfortune of wounded veterans are particularly egregious.  The VA Office of Inspector General will continue to vigorously pursue those who defraud veterans and the Government for personal gain.  It is our hope that the successful investigative and prosecutive efforts in this case will serve as a deterrent to others from engaging in criminal activity that cheats veterans and the VA programs designed to assist our nation’s heroes.”

“Today’s sentencing of Kevin Lombard and Judith Paixao sends a clear message that fraud against our veterans will not be tolerated. These veterans endured many sacrifices to protect our country from harm,” stated IRS Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. He further added, “IRS Criminal Investigation, in conjunction with our law enforcement partners, is committed to identifying, investigating, and prosecuting individuals who engage in fraud and deceit, and exploit programs designed to benefit others to satisfy their greed.”



Case Number: 13cr3788-JM

Judith Ann Paixao

Age: 61

Afton, Virginia

Kevin Lombard

Age: 64

Afton, Virginia



Count 1: Conspiracy to defraud the United States and commit the offenses (18 U.S.C. § 371).
Guilty as to both defendants

Counts 2-9: Theft from an organization receiving federal funds (18 U.S.C. § 666(a)(1)).
Defendant Paixao: Guilty as to all counts
Defendant Lombard: Guilty on counts 2-4, 6-10

Counts 10-12: False claims (18 U.S.C. § 287)
Guilty as to all counts for both defendants

Count 13: Mail fraud (18 U.S.C. § 1341)
Defendant Paixao: Guilty


PAIXAO – 6 months’ custody on all counts, 2 years’ supervised release with a condition of 6 months’ home confinement on all counts, concurrent; $1,300 special assessment; $75,956 restitution ($54,688 to VA and $21,268 to Bob Woodruff Foundation); $76,873 forfeiture

LOMBARD – 3 months’ custody on all counts, 2 years’ supervised release with a condition of 3 months’ home confinement on all counts, concurrent; $1,100 special assessment; $54,688 restitution to VA; $70,873 forfeiture



Department of Veterans Affairs, Office of Inspector General
Internal Revenue Service, Criminal Investigation

Updated March 10, 2016

Financial Fraud
Press Release Number: CAS16-0310-Paixao