United States Attorney’s Office
District of Columbia
U.S. Attorney Ronald C. Machen Jr.
FOR IMMEDIATE RELEASE
Friday, January 6, 2012
Public Affairs
Website: www.usdoj.gov/usao/dc
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
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).
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.
Bill Miller
Public Information Officer
U.S. Attorney’s Office for the District of Columbia
