Senior Officer of Alexandria-Based AvalonBay Communities, Inc., Sentenced For $5 Million Kickback Scheme

ALEXANDRIA, VA—James R. Willden, age 39, of Fredericksburg, Va., was sentenced today to 42 months in prison in connection with a $5 million kickback scheme and ordered to pay $5.5 million in restitution. Willden pleaded guilty on Dec. 11, 2008.

Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Joseph Persichini, Jr., Assistant Director in Charge of the FBI Washington Field Office, made the announcement after sentencing by United States District Judge Claude M. Hilton.

In a statement of facts filed with his plea agreement, Willden admitted that he had participated in a $5 million scheme to defraud AvalonBay Communities, Inc., (“AvalonBay”) an equity Real Estate Investment Trust primarily engaged in developing, acquiring and managing apartment communities within the United States. AvalonBay maintains its corporate offices in Alexandria, Va. Until his resignation in November 2006, Willden was AvalonBay’s Vice President of Engineering, in charge of capital improvements and environmental safety for a number of AvalonBay apartment communities throughout the United States.

Court papers state that Willden conspired with Michael Schroll, the owner and chief executive officer of San Jose Water Conservation Corporation. From mid-2004 until November 2006, Willden arranged for AvalonBay to pay Schroll’s company, either directly or through a prime contractor, $5 million to perform mold removal or maintenance work on AvalonBay properties, when Schroll’s company performed no services. Schroll returned the bulk of those funds to Willden as a kickback. In return for facilitating the scheme, Willden allowed Schroll’s company to retain $1.2 million of AvalonBay funds. On Oct. 15, 2008, Michael Schroll pleaded guilty to one count of conspiracy and was sentenced on Jan. 23, 2009, to 16 months incarceration.

In order to facilitate the payments to Schroll’s company, James Willden, according to court papers, conspired with his brother Arthur Willden, of Longmont, Colo. Arthur Willden was a senior employee of Tetra Tech, Inc., a company specializing in environmental cleanup and engineering, at its office in Fort Collins, Colo. Under the direction of Arthur Willden, Tetra Tech hired Schroll’s company to perform mold removal services on AvalonBay properties, when Schroll’s company performed no services. On Feb. 26, 2009, Arthur Willden pleaded guilty in Alexandria to conspiracy and obstruction of justice. He will be sentenced on May 29, 2009.

This case was investigated by the FBI. Assistant United States Attorney Stephen P. Learned prosecuted the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.usdoj.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pacer.login.uscourts.gov.