Council Member Harry Thomas, Jr. Pleads Guilty to Felony Charges in
Scheme Involving Government Funds
Resigns from Office, Agrees to Pay $353,500 in
Restitution
| U.S. Attorney’s Office January 06, 2012 |
District of Columbia |
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).
| (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.