Former CEO of Bristol Virginia Utilities Authority Pleads Guilty
Wes Rosenbalm Admits to Defrauding the Internal Revenue Service and Corruptly Soliciting Things of Value from Vendors of BVU
ABINGDON, VIRGINIA – Acting United States Attorney Anthony P. Giorno, along with representatives from the Federal Bureau of Investigation and the Internal Revenue Service- Criminal Investigations, announced today the latest conviction in the ongoing investigation into corruption at the Bristol Virginia Utilities Authority (BVU).
Today in the United States District Court for the Western District of Virginia, Wes Rosenbalm, 45, of Johnson City, Tennessee, the former CEO at BVU, waived his right to be indicted and pled guilty to a one count Information charging him with conspiracy to defraud the Internal Revenue Service and conspiracy to commit Federal Program Fraud.
“It’s unfortunate when we see people in positions of power abuse those positions for personal financial gains,” Acting United States Attorney Anthony P. Giorno said today. “Their abuses have consequences not only for them, but their families as well. This case demonstrates that the US Attorney’s office and our law enforcement partners will be on the lookout for abuses of power and we will hold accountable those who violate the public trust.”
“Individuals such as Mr. Rosenbalm, that take advantage of the public to line their own pockets will be held accountable," said Assistant Special Agent in Charge Kathryn Montemorra on the Internal Revenue Service- Criminal Investigations. “Abusing positions of trust, is a blight on any community and Mr. Rosenbalm's contributions to this scheme were extensive. Today's plea should be a warning to those involved in criminal activities that they will be held accountable for their actions.”
“Mr. Rosenbalm's solicitation and acceptance of such extravagant "gifts" at the expense of clients demonstrates the unfortunate need for consumers to be aware of and report public corruption at any government level. Public corruption remains our top criminal priority,” said Special Agent in Charge Adam S. Lee of the FBI’s Richmond Division.
According to evidence presented today by Assistant United States Attorney Zachary Lee, Rosenbalm was the CEO at BVU and between January 1, 2003 and January 1, 2014, he and others conspired to defraud the Internal Revenue Service by willfully evading income taxes and conspired to corruptly solicit things of value as a reward for the awarding of contracts to vendors of Bristol Virginia Utilities Authority.
In a statement of facts agreed to by both parties and filed with the court during today’s guilty plea hearing, Rosenbalm admitted to soliciting, and using others to solicit gifts and monetary payments from a variety of vendors that did business with BVU while BVU was receiving federal grant funds. These vendors felt the gifts and other payments they were being asked to provide to BVU had to be provided in order to continue to do business with BVU. Rosenbalm has admitted to soliciting gifts and monetary payments that include, but are not limited to: tickets to University of Kentucky basketball games; $663 for alcohol purchases at a BVU customer appreciation event; $2,850 for a Thanksgiving lunch for BVU employees; $15,000 for the BVU Christmas dinner; $5,500 for the BVU Children’s Christmas party; and $4,125 for a scorer’s table at the school one of Rosenbalm’s children attended. Rosenbalm has agreed to pay $50,000 forfeiture to account for this conduct.
In addition, Rosenbalm admitted to defrauding the IRS by failing to truthfully report income and benefits received by himself and other BVU employees. This unreported compensation and benefits included country club memberships, personal use of BVU vehicles, bonuses paid in cash to employees, and bonuses paid to employees using gift cards. Rosenbalm has agreed, as part of his plea agreement, to pay $150,000 in restitution to BVU for taxes and penalties owed by BVU as a result of his conduct. He also faces a maximum possible sentence of five years in prison and/or a fine of up to $250,000.
The investigation of the case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Zachary Lee will prosecute the case for the United States.