Two Former Vice Presidents at Bristol Virginia Utilities Authority Plead Guilty
ABINGDON, VA—During separate hearings today in the United States District Court for the Western District of Virginia in Abingdon, two former Vice Presidents of Field Operations for the Bristol Virginia Utilities Authority pled guilty to federal conspiracy charges related to their individual receipt of kickbacks.
Robert James Kelley, Jr., 61, of Lexington, Va., waived his right to be indicted and pled guilty today to a one-count Information charging him with a multi-object conspiracy to commit mail fraud, money laundering and to the defraud the United States.
In a separate hearing today, David Copeland, 44, of Bristol, Va., also waived his right to be indicted and pled guilty to a one-count Information charging him with a multi-object conspiracy to commit wire fraud and money laundering.
“The investigation and prosecution of public corruption on all levels continues to be one of our top priorities,” Acting United States Attorney Anthony P. Giorno said today. “In addition to the economic consequences, kickback schemes such as the one carried out by Mr. Kelley and Mr. Copeland compromise the public’s trust in the individuals and companies that are supposed to be serving the best interests of their customers and the taxpayers.”
“Public corruption is the FBI’s top criminal investigative priority. Corruption in the governmental contracting process deprives taxpayers of the essential services they are owed by their government and shakes their faith in the system,” said Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division. “The conspiracy between Mr. Kelly and Mr. Copeland caused harm, not simply by stealing taxpayer money through illegal kickbacks; their scheme caused harm to the community by subverting a process it should be able to rely upon to serve its members.”
“Kelley’s and Copeland’s conduct in this fraud scheme is egregious, not just because of the dollars involved but because of their abuse of power. By exploiting their positions, they were able to line their pockets using fraud and deceit,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “The message to lawbreakers should be clear, we will continue to aggressively investigate crimes involving financial fraud and in particular fraud that erodes the public’s confidence.”
According to information presented at today’s guilty plea hearings by Assistant United States Attorney Zachary Lee, Kelley Jr. was the Vice President of Field Operations for the Bristol Virginia Utilities Authority [BVU] from January 2006-February 2009. During his tenure, Kelley Jr. was responsible for approving billing invoices submitted to the utility authority, including invoices provided by Company #1, which performed contract work for BVU.
Kelley Jr. admitted today that between January 2006 and February 2009 he approved false invoices submitted by Company #1 for work not actually completed. These false invoices resulted in at least $330,510 in fraudulent billing by Company #1 to the BVU. Kelley Jr. approved these invoices knowing they contained false information. In addition, Kelley Jr. also prepared false invoices that he sent to Company #1 that falsely claimed he had done consulting work for Company #1 through his own RJK Consulting business. Kelley admitted today that he took these actions because he was paid at least $160,000 in kickbacks as proceeds from the fraudulent billings by Company #1. Additionally, he failed to report his $160,000 kickback income on his 2006, 2007, 2008, and 2009 tax returns.
During a separate hearing, David Copeland, who was the Vice President of Field Operations for BVU from March 2009-February 26, 2015, admitted that on or about and between January 1, 2010 and December 31, 2013, Company #1 submitted false invoices to Copeland for work not actually completed by Company #1 on behalf of BVU pursuant to a Virginia Tobacco Commission grant provided to the utilities authority. These false invoices reflected fraudulent amounts of rock drilling adder relating to the boring through of rock in order to lay fiber optic cable. These false invoices resulted in at least $143,000 in fraudulent billing by Company #1 to BVU. After receiving payment from BVU, Company #1 conducted financial transactions to convert portions of the funds it received from BVU as a result of the fraudulent billings to cash in order to disguise its origins. In this case, $40,000, was then paid to Copeland.
At sentencing, each defendant faces a maximum possible penalty of five years in prison and/or a fine of up to $250,000. In addition, Kelley, Jr. has agreed to pay a forfeiture money judgment in the amount of $165,000, and also has agreed to pay restitution in the amount of $330,510. Copeland has also agreed to pay a forfeiture money judgment in the amount of $50,000, and has agreed to pay restitution in an amount of at least $144,000.
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.