New Jersey Man Sentenced for Aiding and Abetting Theft of Federal Grant Funds
For Immediate Release
U.S. Attorney's Office, Southern District of West Virginia
CHARLESTON, W.Va. – Aleksey Krylov, 42, of South Orange, New Jersey, was sentenced today to three years of federal probation, including six months on home detention, and ordered to pay $94,197.93 in restitution for aiding and abetting theft from programs receiving federal funds. Krylov admitted to diverting $94,197.93 in federal abandoned mine land (AML) remediation sub-grant funds to a West Virginia Department of Environmental Protection (WVDEP) employee who had secretly helped Krylov obtain an AML grant award.
According to court documents and statements made in court, from in or about April 2017 until in or about August 7, 2019, Krylov enlisted Jerry D. Elkins to assist Krylov and one of Krylov’s companies with their application for a WVDEP AML pilot program sub-grant. Elkins was initially a regional planner and later an inspector for the WVDEP during the time period, and had become acquainted with Krylov prior to joining the WVDEP.
The DEP receives grant funding from the United States Department of the Interior Office of Surface Mining Reclamation and Enforcement (OSMRE) for, among other purposes, accelerating the remediation of eligible sites for economic revitalization and community development purposes under the Abandoned Mine Land Economic Revitalization (AMLER) program. Since 2016, West Virginia has received $181 million in AMLER block grant funds. Numerous private entities apply to receive AML sub-grants, and the process for selecting projects to receive sub-grant awards is competitive.
Krylov and his company proposed to construct and operate an aquaponics facility that would produce commercial quantities of vegetables and fruits at a project site near Madison. Krylov agreed to pay Elkins a portion of the federal grant dollars in exchange for Elkins’ help. To assist Krylov and his company, Elkins disclosed internal WVDEP deliberations to Krylov, boosted Krylov’s project internally at WVDEP, submitted a report that was required to obtain the grant award, obtained public support for the project, provided his opinion and suggestions for improving the sub-grant application, recruited local individuals to work with Krylov, collected water samples, and continuously monitored the application’s status.
Krylov admitted to paying Elkins for his services with checks and electronic fund transfers drawn from federal sub-grant disbursements totaling $94,197.93. Krylov further admitted that Elkins had no right to receive these funds and that he aided and abetted Elkins’ actions in fraudulently obtaining the $94,197.93. Krylov also admitted that he paid Elkins through a shell entity, Wanaque River Holdings LLC (“Wanaque”), that Elkins set up solely to receive and obscure payments from Krylov. Elkins was paid by Krylov through Wanaque for fictitious invoices that Elkins created using an online bill pay platform, Bill.com.
Elkins, 54, of Danville, pleaded guilty to theft from programs receiving federal funds and was sentenced on November 30, 2023, to three years of federal probation, including 10 months on home detention, and ordered to pay $94,197.93 in restitution.
United States Attorney Will Thompson made the announcement and commended the investigative work of the U.S. Department of the Interior Office of Inspector General-Office of Investigations and the West Virginia Commission on Special Investigations.
United States District Judge Irene C. Berger imposed the sentence. Assistant United States Attorneys Holly Wilson and Kathleen Robeson prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:23-cr-99.
Updated January 11, 2024