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Council Member Harry Thomas, Jr. Pleads Guilty to Felony Charges in
Scheme Involving Government Funds
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| U.S.
Attorney’s Office January 06, 2012 |
District
of Columbia (202) 514-7566 |
WASHINGTON—Harry L. Thomas, Jr., a member of the Council of the District of Columbia, pled guilty today to federal theft and tax charges in a scheme in which he used more than $350,000 in taxpayers’ money that was earmarked for the arts, youth recreation, and summer programs for his own personal benefit, including to pay for vehicles, clothing, and trips.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr.; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Ronald T. Hosko, Special Agent in Charge of the FBI Washington Field Office’s Criminal Division; and Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).
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| (Left to right) Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Ronald T. Hosko, Special Agent in Charge of the FBI Washington Field Office’s Criminal Division; and U.S. Attorney for the District of Columbia Ronald C. Machen Jr. |
Thomas, 51, pled guilty in the U.S. District Court for the District of Columbia to a criminal Information charging him with one count of theft concerning programs receiving federal funds and one count of filing a false tax return. As part of the plea agreement, he agreed to submit his resignation from the District of Columbia Council.
The Honorable John D. Bates scheduled sentencing for May 3, 2012. The theft charge carries a maximum penalty of 10 years in prison and the tax charge carries up to three years of incarceration. Under federal sentencing guidelines, the parties have agreed that the applicable range would be 37 to 46 months in prison and a possible fine of $7,500 to $75,000.
The plea agreement calls for Thomas to make restitution in the amount of $353,500 and to forfeit a 2008 Victory motorcycle and 2008 Chevrolet Tahoe, both of which are traceable to proceeds of his crime. Thomas also must pay all outstanding taxes, interest and penalties.
According to a statement of offense signed by the government as well as the defendant, Thomas arranged to steer a total $353,500 from a non-profit public-private partnership that got funding from the District government. Thomas directed the money to two entities that he controlled, and he then used it for his own purposes.
Among other things, money that was meant to benefit the District’s residents was spent by Thomas to purchase vehicles, take trips, pay expenses at clothing stores and restaurants, and cover his expenses in helping to set up entertainment for a 2009 inaugural ball.
“Today Mr. Thomas took responsibility for outrageous conduct that can only be described as a flagrant abuse of the public trust,” said U.S. Attorney Machen. “Time and time again, he used for personal gain taxpayer dollars that were intended to benefit this city’s most important resource—its children. As a city and a community, we are now one step closer to putting this dark chapter in D.C. politics behind us.”
“Mr. Thomas today admitted that he used his official position as an elected member of the Council of the District of Columbia to steer more than $350,000 in taxpayer money to himself,” said Assistant Attorney General Breuer. “Almost immediately upon taking office, Mr. Thomas began systematically stealing funds intended for youth recreation, summer and arts programs, and using those funds to purchase cars, trips, clothing, and entertainment. Public corruption at any level of government is intolerable, and today Mr. Thomas is properly being held accountable for his crimes.”
“Elected officials who violate the public trust for their own benefit strike at the very heart of our democratic system,” said Special Agent in Charge Hosko, of the FBI. “Public corruption remains the FBI’s top criminal priority, and we will continue to pursue those who replace the trust and integrity of public office with their own greed and dishonor.”
“The IRS enforces the nation’s tax laws, but also takes particular interest in cases where someone, specifically a public official for their own personal benefit, has taken what belonged to others,” said Acting Special Agent in Charge Hylton, of IRS-CI. “With both law enforcement and financial investigation expertise, our agents are uniquely qualified to assist state and federal law enforcement agencies with these types of cases by following the money. We are pleased with the successful resolution of this investigation due to the cooperative efforts of our law enforcement partners, the FBI and the U.S. Attorney’s Office.”
Thomas was elected to the Council in November 2006 and took office as the representative for Ward 5 in January 2007. According to the statement of offense, his scheme to steal taxpayer money began as early as April 2007 and continued at least until February 2009.
During his first four-year term in office, Thomas was Chair of the Council’s Committee on Libraries, Parks, Recreation and Planning, which involved oversight responsibility for the D.C. Department of Parks and Recreation. In that role, he had dealings with a non-profit public-private partnership that provided resources and developed programs to benefit children and youth in the District of Columbia. The partnership was primarily funded by the D.C. government through funds designated by the Mayor and Council for particular youth-related purposes. The partnership provided grants to organizations for programs tailored for children and youth.
The statement of offense provides details about Thomas’s role in seven grants awarded by the public-private partnership between July 2007 and August 2009. These grants were awarded to three organizations for initiatives that were supposed to include an arts-oriented youth program, youth baseball programs, and a summer youth program. They were paid after the partnership received documents that falsely represented how the money would be spent; these forms, according to the statement of offense, were done at Thomas’s direction.
After receiving the grant money, however, and also at Thomas’s direction, the organizations issued checks to Thomas’s own corporations. According to the statement of offense, Team Thomas, a purported non-profit, received $108,000. HLT Development, a for-profit business, received $238,000. The money was used primarily for Thomas’s personal benefit.
The public-private partnership also issued a $110,000 check in February 2009 to one of the organizations that was purportedly to fund a youth-centered inaugural event. However, the statement of offense notes that the money was actually to fund the debts from an event known as the 51st State Inaugural Ball, organized by Thomas and others, in January 2009. This event was a political event, not a program directed at benefitting youth, and it was outside the scope of the public-private partnership’s mission to serve the children of the District of Columbia.
Thomas had advanced $7,500 for entertainment for the event, and the organization repaid him through HLT Development.
As part of the plea, Thomas also admitted that he filed false tax returns that did not declare $25,000 in income from tax year 2007, $278,000 from 2008, and $43,000 from 2009.
The guilty plea comes nearly six months after Thomas agreed to repay the District of Columbia $300,000 to settle a civil lawsuit filed against him by the District of Columbia Office of the Attorney General. The civil lawsuit, filed in June 2011 in the Superior Court of the District of Columbia, dealt largely with Thomas’s activities with one of the organizations. As part of that settlement, HLT Development also was required to donate sporting goods and equipment to a D.C. affiliate of Little League Baseball.
Under the plea agreement, the amount of restitution Thomas must pay in the criminal case will be offset by any payments he has made in the civil lawsuit.
This case was investigated by the FBI’s Washington Field Office and the Washington Field Office of IRS-Criminal Investigation. The investigation is continuing.
In announcing the plea, U.S. Attorney Machen, Assistant Attorney General Breuer, Special Agent in Charge Hosko, and Acting Special Agent in Charge Hylton commended the work of those who investigated the case for the FBI and IRS-CI.
They also acknowledged the efforts of Assistant U.S. Attorneys Jonathan W. Haray, Courtney G. Saleski, Bridget M. Fitzpatrick, Ellen Chubin Epstein and Matthew Graves of the Fraud and Public Corruption Section in the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney Peter Mason of the Public Integrity Section of the Department of Justice’s Criminal Division, who have prosecuted the case.
Finally, they expressed appreciation to Criminal Investigators Matthew Kurtz, Mark Crawford, and Melissa Matthews; Paralegal Specialists Tasha Harris, Diane Hayes, Sarah Reis, Shanna Hays, Lenissa Edloe, and Monica Johnson; Legal Assistants Jared Forney and Krishawn Graham; and Litigation Technology Specialist Tracy Van Atta, all of the U.S. Attorney’s Office.
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