The former owner of a coffee shop in Rosslyn has been convicted of an extensive credit card fraud scheme.
Adiam Berhane, 50, was the co-owner of Caffe Aficionado in Rosslyn, which was open from 2013 until 2016, when the cafe was shut down following a police raid. Federal prosecutors said Berhane used the cafe to process fraudulent payments after obtaining stolen credit card information from the internet — and last week a federal jury in Alexandria agreed.
“A federal jury convicted a Washington, D.C. woman today on multiple charges of conspiracy to commit bank fraud, bank fraud, trafficking in unauthorized access devices, aggravated identity theft, unlawful possession of 15 or more access devices, and possession of access device-making equipment with intent to defraud,” the U.S. Attorney’s Office for the Eastern District of Virginia said in a press release Friday.
According to prosecutors, Berhane used the stolen credit card info to create fake cards, which were then used in the cafe and to purchase gift cards as well as luxury goods from several local stores. While Caffe Aficionado might have been a front for illegal activity, it was also well regarded for its coffee, garnering 4.5 stars on Yelp and some critical acclaim.
“Caffe Aficionado sits all alone, atop Rosslyn,” one local critic wrote in December 2013. “Even if this ranking is temporary, hopefully it will draw attention to what is one of the finest coffee shops in the area. I love this place, and you will, too.”
Arlington County police were initially tipped off about the crime when someone from out of town, with no connection to Arlington, reported fraudulent attempted credit card charges at the cafe. Most of the fraud involving the coffee shop, however, involved redemption of gift cards purchased with cloned credit cards, according to federal prosecutors.
“More than a third of Caffe Aficionado’s income from June 2013 to July 2016 came from a pattern of highly unusual redemptions of American Express gift cards, with the pattern beginning several months before Caffe Aficionado actually opened in approximately October 2013,” said the press release.
Berhane’s business partner, Clark Donat, pleaded guilty to multiple financial crimes in 2017, including credit card fraud, money laundering and racketeering. Court records show he received a 25 year prison sentence with 11 years suspended. He was not charged in the federal case.
Berhane was initially charged in Arlington County, but a couple of years of legal wrangling — including accusations that defense attorneys had to process thousands of pages of documents by hand under rules set by then-prosecutor Theo Stamos — ultimately resulted in the local charges being dropped in 2019. Federal prosecutors then took up the case.
Under federal sentencing guidelines, Berhane will face between 2 and 196 years in prison.
Berhane was previously convicted of a credit card fraud scheme in New York City in the early 2000s. She told ARLnow in early 2014 that what set Caffe Aficionado apart was the service.
“I think it’s all about service. Follow the Golden Rule, it’s not that hard,” she said.
The press release from the U.S. Attorney’s Office is below.
SFH Prices Up 11 Percent — “Something may have to give, eventually, but, for now, average single-family-home sales prices in Arlington continue to spike, according to new data. The average sales price of the 108 existing single-family homes that went to closing across the county in June stood at just over $1.35 million, up 11 percent from the already red-hot market of June 2021.” [Sun Gazette]
CAIR Backs Arlington House Bill — “The Council on American-Islamic Relations (CAIR), the nation’s largest Muslim civil rights and advocacy organization, today expressed its support for legislation that would rename a memorial currently dedicated to Confederate General Robert E. Lee in Arlington, Va.” [Press Release]
Arlington Crisis Line Now at 988 — “A new 9-8-8 crisis and support hotline is now active across the United States, including here in Arlington County. In 2020, Congress designated a new 9-8-8 dialing code to operate through the existing National Suicide Prevention Lifeline (NSPL) network, which has more than 200 locally operated and funded crisis lines across the country. PRS, Inc. operates the local network in Arlington.” [Arlington County]
Public Comment Rules Stretched — “After getting pilloried a month before for what critics called a heavy-handed approach to enforcing rules on public comment, County Board Chairman Katie Cristol on July 16 loosened her grip on the gavel just a bit. Cristol acknowledged that she was being a little more loose in her interpretation of rules for the July board meeting than she had been in June, when she shut down comment on the government’s Missing Middle housing proposal after just two speakers at the public-comment period.” [Sun Gazette]
Late Metro Critic Was Arlingtonian — “Matt Hilburn, a journalist and communications specialist best-known for his creation and curation of the popular and unsparing transportation social media account Unsuck DC Metro, died July 17 at his home in Arlington, Va. He was 54. The cause was complications of kidney cancer that had metastasized, said his father.” [Washington Post]
Board Members on Abortion Rights — From Arlington County Board Chair Katie Cristol: “We are joining with the many Arlingtonians who are now expressing their anger and frustration and their fear at the Dobbs v Jackson decision and at Gov. Youngkin’s threat to abortion rights in Virginia. We are committed as this Board to mitigating and preventing the public health crisis that these actions could precipitate and we will advocate for the protection of the fundamental human right to bodily autonomy.” [Blue Virginia]
Tech Event in Rosslyn Tonight — “For the 7th consecutive year, DCA Live and our partners are excited to recognize the 2022 Red Hot Companies, the Washington region’s fastest growing and most exciting companies. We’ll be profiling these companies over the coming weeks and will celebrate them with a lively, fun event on the evening of Wednesday, July 20 on the rooftop of Sands Capital in Rosslyn, VA.” [DCA Live]
Falls Church Check Fraud — “Last week, after being notified of suspicious activity, the City of Falls Church discovered fraudulent checks were cashed using the City’s accounts… City of Falls Church Police are aware of a possible national trend of checks being stolen from blue USPS mailboxes. The Police advise residents and businesses to mail checks and valuables directly through a post office.” [City of Falls Church]
It’s Wednesday — Humid throughout the day. High of 91 and low of 75. Sunrise at 6:01 am and sunset at 8:31 pm. [Weather.gov]
Flickr pool photo by Jeff Vincent
Welcome to Our Summer Interns — Two interns have joined ARLnow for the summer. Mavis Chan of the University of Missouri will focus on local news reporting while Pia Kramer, graduate of Virginia Tech and Arlington’s Washington-Liberty High School, will focus on audience engagement.
Passengers Spend Hours on Planes at DCA — “Thais Austin wanted to get home to the District after a weekend visit with family in Jacksonville, Fla. Instead, she said, she and other passengers were stuck on the Reagan National Airport taxiway for three hours Sunday night, unable to exit their plane… Hundreds of passengers on at least a half-dozen other flights reported similar delays after thunderstorms downed trees, flooded roads and left thousands without power in the Washington region.” [Washington Post]
Armed Robbery in Crystal City — “At approximately 10:02 p.m. on May 23, police were dispatched to the report of a robbery. Upon arrival, it was determined the three victims were walking on the sidewalk when they were approached from behind by the unknown suspects. Suspect One brandished a firearm and demanded the victim’s property, including their clothing. During the incident, Suspect One struck the victims with the firearm, causing injury. The suspects then fled into a parking garage with the stolen property which included cash, clothing and electronics.” [ACPD]
Signature Season Salutes Sondheim — “Signature Theatre announces its 33rd season today, which highlights the organization’s long-time relationship with the legendary Stephen Sondheim. Signature has produced 31 Sondheim productions in its 32 season history – more than any other theater in North America. The 33rd season will feature three more.” [Signature Theatre]
Michigan Election Fraud Has Arlington Link — A man at the center of a scandal over allegedly fraudulent petition signatures in the Michigan governor’s race was previously convicted of a similar crime in Arlington following an unsuccessful attempt to change the county’s form of government. [TPM]
Student Killed in Fight Near Fairlington — “A teenager from Alexandria City High School was killed during a ‘large fight’ at the Bradlee Shopping Center McDonald’s, police say. According to scanner traffic, the incident started around 12:21 p.m. with a call about a brawl happening at the McDonald’s at 3646 King Street. Police said one person was stabbed and critically injured, then pronounced dead at the hospital.” [ALXnow]
It’s Wednesday — Overcast throughout the day. High of 65 and low of 57. Sunrise at 5:50 am and sunset at 8:24 pm. [Weather.gov]
Pentagon City Plan Passes Unanimously — “The Arlington County Board adopted a new vision for a vibrant and livable Pentagon City, following an 18-month planning process. The Board voted 5-0 to approve the Pentagon City Sector Plan (PCSP) and its associated Comprehensive Plan and Zoning Ordinance amendments.” More than 110 people spoke at the Board’s meeting on Saturday, many of them opposed to a portion of the plan that would allow a significant increase in density on the RiverHouse property. [Arlington County]
Second HQ2 Phase Advancing — “PenPlace, the 3.2 million-square-foot second phase of Amazon.com Inc.’s second headquarters, has earned the key support of Arlington County staff as it heads into its final stretch of reviews. During the last Site Plan Review Committee meeting Thursday, Peter Schulz, a staffer with the Arlington planning division, said ‘staff has no major outstanding issues’ with regard to PenPlace’s architecture and landscape design.” [Washington Business Journal]
Cookie Purveyor Coming to Courthouse — “Captain Cookie & The Milkman is opening across the river for the first time as a part of the local treat-yourself brand’s ongoing regional expansion. The shop should open at 2200 Clarendon Blvd. in Arlington’s Courthouse neighborhood this spring. The space was most recently a GNC. “It’s just a calcium supplement store now,” co-owner Kirk Francis jokes. The menu spans eight flavors of cookies that are baked on site, local milk from South Mountain Creamery, and Ice Cream Jubilee ice cream.” [Washington City Paper]
Metro Reducing Delays on Local Lines — “Additional weekday service improvements will start Monday, February 14, with customers seeing more trains, more often on the Blue, Orange and Silver lines, at least every 20 minutes. The change expands on earlier service improvements to the Red (every 12 minutes), Green and Yellow lines (every 20 minutes).” [WMATA]
Arlington Company Admits PPP Fraud — “Zen Solutions Inc., located in Arlington, Virginia, has agreed to pay approximately $31,000 in damages and civil penalties to settle allegations that it violated the False Claims Act by obtaining more than one Paycheck Protection Program (PPP) loan in 2020. Zen Solutions also agreed to repay the duplicative PPP loan in full to its lender, relieving the U.S. Small Business Administration (SBA) of liability to the lender for the federal guaranty of approximately $192,000 on the improper loan.” [U.S. Attorney’s Office]
Vehicle Flips Along Washington Blvd — From Dave Statter on Saturday night: “Crash with a vehicle overturned at Washington Blvd & Brookside Dr (betw Rt 50 & Pershing).” [Twitter]
Icy Conditions Possible This Morning — From Arlington’s Dept. of Environmental Services: “Road surface temperatures above freezing have meant no deployment of salt with today’s winter weather event. But be prepared for possible slick spots overnight into the morning. Crews will be on the lookout.” [Twitter]
It’s Valentine’s Day — Today will be mostly sunny, with a high near 33 and wind gusts up to 21 mph. Sunrise at 6:59 a.m. and sunset at 5:45 p.m. Tomorrow will be sunny, with a high near 41. [Weather.gov]
A woman used a fraudulent cashier’s check to steal a vehicle from an Arlington resident who was offering it for sale, according to police.
A woman who identified herself as “Stacy James” showed up at a home with the fake check in hand earlier this month, ostensibly to buy a used vehicle that was listed on Facebook Marketplace, police say. Five days later, the victim was notified by her bank that the check was fraudulent.
Police are now asking for the public’s help in identifying the alleged fraudster, who was wearing sunglasses and a mask but who had distinctive piercings in one ear.
More from ACPD:
The Arlington County Police Department’s Criminal Investigations Division is investigating a larceny from false pretenses and is seeking the public’s assistance identifying the suspect captured in home surveillances images.
On June 11, the victim filed an online police report regarding a fraud. The investigation determined the victim was selling a used car on Facebook Marketplace when the suspect, who identified herself as ‘Stacy James,’ made contact with him. On June 5, the suspect arrived at the victim’s home, inspected the vehicle and provided the victim with what appeared to be a cashier’s check for the purchase. On June 10, the victim was notified by their bank that the check was fraudulent.
The suspect is described as a white female, approximately 5’2″ tall and weighing 155 lbs. She has long, red/purple hair and multiple piercings on her left ear.
Anyone with information related to this incident and/or the suspect’s identity is asked to contact Detective L. Bello at 703-228-4166 or [email protected] Information may also be reported anonymously through the Arlington County Crime Solvers hotline at 1-866-411-TIPS (8477).
Bye Bye, Brood X — “Have you noticed dead cicadas on the ground, or that the bugs are not chorusing as loud as during past weeks? It’s because cicadas reached peak numbers last week in and around the D.C. area and are starting to die at a rapid rate. In some places, you may be smelling them as they rot away.” [Washington Post, Washingtonian]
Firefighters Awarded for Daring Rescue — “On October 31, 2020, Arlington County Fire Department units, including the technical rescue team, were dispatched to Windy Run Trail for an injured person. Communications reported that a female hiker had sustained injuries after falling approximately 30 to 40 feet down an embankment. Initial reports were unclear as to the exact location of the injured person.” [WJLA]
Arlington Man Sentenced for Fraud — “An Arlington businessman was sentenced today to 21 months in prison with three years of supervised release for making false statements to multiple federal agencies in order to fraudulently obtain multimillion-dollar government contracts, COVID-19 emergency relief loans, and undeserved military service benefits.” [Dept. of Justice]
Reminder: Pike Blues Fest This Weekend — “This year a hybrid three-day Columbia Pike Blues Festival Weekend (Friday to Sunday, June 18, 19 and 20) combines live-streaming concerts and ticketed outdoor performances that will get you back into your summer groove.” [ARLnow]
Update on Local Reality Show Contestant — “What is Bachelorette [contestant] Jason from Arlington up to right this very second? Well, last night he crossed the river into DC to host Zac Clark, his friend and fellow former Bachelorette contestant.” [Washingtonian]
Amazon Helping to Fund Housing — “Amazon will provide $125 million in financing to build or preserve an estimated 1,000 units of affordable housing on Metro-owned land in the D.C. region, the company announced Wednesday. The online retail giant, which stands to receive up to $750 million in cash grants from Virginia if it hires at least 37,850 workers at its new corporate headquarters in Arlington, says it will commit below-market loans, lines of credit, and grants to developers who have joint development agreements with WMATA.” [DCist, Washington Post]
Rent Still Below Pre-Pandemic Levels — “In the D.C. region, rents rose 20.1 percent from March 2020 to May 2021 in Fredericksburg, Va.; by 16.4 percent in Frederick, Md., and by 9.6 percent in Laurel, Md. But rents declined by 7.8 percent in D.C., year-over-year, by 10.5 percent in Chevy Chase, Md., and by 5.2 percent in Arlington, Va. Clearly, the flight to the suburbs meant increased rents in areas farther from D.C.” [Washington Post]
Fairfax County’s Namesake Questioned — “The [Fairfax County] seal is of a different time. Adopted seven decades ago, it bears a version of the coat of arms belonging to Thomas Fairfax, the sixth Lord Fairfax and a slaveholding British loyalist who once owned much of the land that makes up Fairfax County today. As neighboring counties and cities reexamine their logos and symbols, it seems like only a matter of time before Fairfax County faces its own questions.” [Tysons Reporter]
One of five individuals implicated in a scheme to steal mail from Postal Service boxes around Arlington County has pleaded guilty.
Aaron Kyle Johnson pleaded guilty in Alexandria federal court on May 28 in connection to the scheme, which lasted more than a year, a spokesman for the U.S. Attorney’s Office tells ARLnow.
A statement of facts document entered with the guilty plea says that Johnson and his co-conspirators stole mail from blue mailboxes around Arlington, including those outside the post offices in Buckingham and on N. George Mason Drive, using a USPS master key known as an “arrow key.”
The document does not say how the suspects obtained the key and prosecutors did not provide additional detail after inquiries by ARLnow. In a discussion on an online forum among numerous residents who reported having their mail stolen, one resident reported having been told by law enforcement that the key was stolen from a postal employee at gunpoint.
The crime spree started in late 2019 and continued until March 2021, according to the document. There were numerous victims, including individuals and local businesses. ARLnow’s initial report detailing numerous reports of mail thefts, mostly from the George Mason Drive post office, was published in October 2020 after we photographed a U.S. Postal Inspection investigator kneeling besides one of the post office’s blue boxes.
The suspects, prosecutors say, would steal checks from mailed letters and fraudulently deposit them at local banks, using false identification and forgery. In one case, a $21,000 check from an Arlington business was stolen and “altered such that it was made payable to ‘John Martian,'” according to the document.
In early March 2021, Johnson and another defendant were found “in possession of approximately 150 personal checks and approximately 50 business checks drafted by individuals and businesses located in and around Arlington County, Virginia, many of which were stolen from the mail in or around Arlington County,” the document says. “Some of the checks were in the process of being altered.”
Johnson and another suspect also kept records of personally-identifiable information gleaned from stolen mail, prosecutors say.
The suspects “disposed of any mail that had no value to the defendant or his co-conspirators such that the mail” — which would have been anything from greeting cards to smaller bill payments — “could not reach its intended recipients,” the document said.
The scheme was perpetrated for financial gain, allowing Johnson to purchase “numerous luxury items,” among other things.
“Between no later than 2019 and in or around March 2021, the defendant used the proceeds gleaned from mail theft, bank fraud, and/or identity theft to enrich himself, including purchases of numerous luxury items, clothing, and apartment rentals,” said the statement of facts, which Johnson admitted to as part of his plea.
The scheme was almost foiled in February 2020 when the stolen key became stuck in a blue USPS collection box in Arlington. Johnson and his co-conspirators discussed what to do, and finally a few hours later one suspect was able to dislodge it, according to the document.
Prosecutors identified four other suspects in the case.
Keshawna Howard, who has a July 27 trial date; Jose Reyes, who is in law enforcement custody in Maryland; Malcom Ward, who was arrested this past Monday on bank fraud charges; and Miles Ward, Malcom’s brother, who died in March. The cause of Miles Ward’s death was not disclosed.
A U.S. Postal Inspection Service spokesperson declined comment when reached by ARLnow in late May, citing an “active investigation.”
Johnson’s sentencing is scheduled for Sept. 24.
Arlington Startup Founder Going to Prison — “An Arlington start-up that promised to help people root out schemes and scams in their own lives was, nearly from the start, a cash cow for the founder’s extravagant lifestyle, start-up CEO Daniel Boice acknowledged in Alexandria federal court Friday… ‘It would be difficult to describe the havoc you created by your fraudulent actions,’ Judge T.S. Ellis III said before sentencing Boice to eight years in prison. ‘It’s an egregious fraud.'” [Washington Post, Dept. of Justice]
Bad Crash on GW Parkway — “A car split in half after crashing into a tree near the First Overlook [of the] George Washington Memorial Parkway Sunday morning, U.S. Park Police confirms. The driver of the car was the only one in the vehicle and was immediately taken to a nearby hospital. U.S. Park Police say their injuries are non-life-threatening.” [WUSA 9, Twitter, Twitter]
Pro-Reopening Parents Blast APS Superintendent — “During the Monitoring Report from Dr. Durán to the School Board, we heard that due to “monumental logistical challenges,” APS will remain hybrid for the remainder of this academic year… Arlington Parents for Education urges the School Board to vote on an urgent and rapid return to school plan when they meet again next — or, if not, propose a vote of no confidence in Dr. Durán for failing to deliver such a plan.” [Press Release]
Group Wants to Save Whitlow’s Building — “As you have seen in the news, Whitlow’s is planning to relocate due to being unable to renegotiate their lease at 2854 Wilson Blvd. However, the building is for sale and presents an investment opportunity and chance to keep Whitlows at its historic location. This form is simply to gauge interest in being part of a group to purchase the building, and is not a commitment to forming any business arrangement, putting up capital, or the like.” [Google Forms, Twitter]
Early Voting Locations for Primary Set — “Members of the Arlington Electoral Board on March 25 approved plans for two satellite-early-voting centers to be used in the runup to the June 8 Democratic primary. Walter Reed and Madison community centers previously had been designated as the locations for early voting by the County Board. The March 25 action set days and hours they will be in operation, although refinements could still be made.” [Sun Gazette]
Local Gov. Candidate Wants to Nix Income Tax — “Could Virginia’s next governor be from Arlington? It’s a longshot, perhaps, but there’s at least one candidate in the running. Arlingtonian Peter Doran on March 24 made his pitch to the Arlington County Republican Committee, saying new thinking is needed if the GOP is to end its drought in statewide elections… Doran pitched the idea of eliminating Virginia’s state income tax.” [Sun Gazette]
Pandemic Doesn’t Change Amazon’s Plans — “Schoettler, who oversees Amazon’s global portfolio of office space, said the past year hasn’t changed the way the company thinks about its office strategy… Amazon still views the office as the best place for work because of the ability for employees to collaborate, and it still envisions its footprint centered around large corporate campuses like its Seattle headquarters and its HQ2 development in Northern Virginia. ” [Bisnow, Twitter]
Sheriff’s Deputy Charged with Fraud — “India Middleton, a deputy sheriff with the Arlington County Sheriff’s Office, was indicted in Georgia by the U.S. Postal Inspection Service on conspiracy to commit wire fraud. Middleton was one of 10 defendants indicted in a multi-state scheme to submit fraudulent loan applications for non-[existent] businesses as part of the Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP), according to a U.S. Department of Justice release.” [Patch, Arlington County]
New Irish Pub Opening Soon — From the social media account of Mattie & Eddie’s, Chef Cathal Armstrong’s new Irish restaurant and bar in Pentagon City: “Practice test! All your grand Irish pints coming soon!” [Facebook]
APS May Cut Magnet High School from Budget — “As part of his proposed budget for the 2022 Arlington Public Schools (APS) fiscal year, Superintendent Francisco Dúran has suggested cutting funding for Arlington students to attend [Thomas Jefferson High School for Science and Technology]. Should the proposed cut pass, current Arlington students at Jefferson will be allowed to remain, but all future classes — including this year’s rising 9th graders — will be barred from attending the school.” [TJ Today]
Lopez’s Gun Loophole Bill Signed — “Introduced by House Majority Whip Alfonso Lopez (D-Arlington), HB 2128 was one of the first pieces of legislation signed into law by Virginia Governor Ralph Northam before the end of the session. The bill expands the amount of time state police and agencies have to conduct a background check on a ‘default proceed’ gun sale, from 3 days to 5 days.” [Press Release]
Possible Rabies Exposure in EFC — “On Saturday, January 30, a raccoon was reported in the area of the 6900 block Williamsburg Boulevard… in the East Falls Church neighborhood. This animal was showing signs of neurological symptoms and was caught and removed by Animal Control after potentially having contact with a pet. The raccoon tested clinically positive for rabies.” [Arlington County]
Rouse Property Showdown Heads to County Board — “With a unanimous vote, Arlington’s Historical Affairs and Landmark Review Board kicked the controversy over preservation of the Rouse estate on Wilson Boulevard up to the County Board. The action, taken Jan. 27 after the matter was fast-tracked through what ordinarily would have been a much more drawn-out process, puts the advisory body at odds with the owners of the 9-acre property, who want to raze the buildings and sell off the tract.” [InsideNova]
Pike McDonald’s Robbed by Irate Customer — “The suspect was in the drive thru line of a business and became irate over an issue with their order. The suspect then parked their vehicle and entered the business yelling and threatening the victim. She slapped items out of the victim’s hand, then pushed her out of the way and stole an undisclosed amount of cash from the register, threw food items on the floor, and damaged property, then fled in a vehicle prior to police arrival.” [ACPD]
Local Businessman Pleads Guilty to Fraud — “An Arlington businessman pleaded guilty today to making false statements to multiple federal agencies in order to fraudulently obtain multimillion-dollar government contracts, COVID-19 emergency relief loans, and undeserved military service benefits… Robert S. Stewart, Jr., 35, was the owner and president of Federal Government Experts LLC, an Arlington-based company that purported to provide various services to the U.S. government.” [U.S. Dept. of Justice]
Volunteers Working to Widen Mt. Vernon Trail — “Volunteers removed overgrown grass and mud from the trail between Memorial Bridge and TR Island in January widening the trail by more than a foot in some spots. Volunteers also fixed drainage of three areas where winter ice sheets were forming. We have multiple upcoming volunteer events through March to continue widening the trail.” [Friends of the Mt. Vernon Trail]
Super Bowl Safety Reminder — “Super Bowl LV is on Sunday, February 7, 2021, and it’s one of America’s favorite annual celebrations… The Arlington County Police Department is teaming up with the U.S. Department of Transportation’s National Highway Traffic Safety Administration to remind football fans everywhere that Fans Don’t Let Fans Drive Drunk.” [ACPD]
Once high-flying local startup Trustify was able to grow due to a massive fraud perpetrated by its former CEO and co-founder, according to federal prosecutors.
Just three years ago, Danny Boice was the toast of the Arlington startup scene. Virginia’s former governor and Arlington’s former County Board chair praised his plan to add 184 jobs in Trustify’s sparkling new Crystal City offices — a plan that, if carried out, would have made him eligible for nearly $120,000 in economic development incentives.
But the grand vision for a thriving “Uber-for-private-investigators” service never came to fruition.
Behind the scenes, the investments that allowed Trustify to grow were being solicited with fraudulent information, overstating Trustify’s financial performance, and eventually the facade came crashing down. The company was placed into bankruptcy proceedings last year.
Boice, a 41-year-old Alexandria resident, pleaded guilty this week to one count of securities fraud and one count of wire fraud in connection to the scheme, according to the U.S. Dept. of Justice. He’s set to be sentenced in March.
Not only did Boice lie to get $18.5 million in investment, the DOJ said, but he diverted nearly $4 million to his personal benefit, including homes and a private jet.
While some frauds may go unnoticed, the Trustify fraud was called out in real time by a devoted critic of Boice and the company. A local tech watchdog who went by the name “Mr. Cranky” wrote at the time of the governor’s jobs announcement, on a now-defunct blog, that Boice and his ex-wife/co-founder were “two low life scum, pretending to be entrepreneurs.”
“It is my opinion that Danny and [his ex-wife] are financing their luxurious lifestyle by crowdfunding money for their Dumpster Fire and using that cash for vacations, house payments, and private schools while investing little in the company,” he wrote. An earlier “Mr. Cranky” post reprinted a letter from Boice’s attorney demanding that he “cease and desist from continuing to publish false and intentionally disparaging statements about Mr. Boice and his company Trustify.”
The full DOJ press release about Boice’s guilty plea is below.
The former chief executive officer (CEO) and co-founder of Trustify, Inc. (Trustify), a privately-held technology company founded in 2015 and based in Arlington, Virginia, pleaded guilty today to his involvement in a fraud scheme resulting in millions of dollars of losses to investors.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger for the Eastern District of Virginia, and Assistant Director in Charge Steven M. D’Antuono of the FBI’s Washington Field Office made the announcement.
Daniel Boice, 41, of Alexandria, Virginia, pleaded guilty to one count of securities fraud and one count of wire fraud before Senior United States District Judge T.S. Ellis III of the Eastern District of Virginia. Sentencing is scheduled for March 19, 2021.
According to admissions made in connection with the plea agreement, beginning in 2015, Boice fraudulently solicited investments in Trustify, a privately held technology start-up company that connected customers with private investigators. Boice raised approximately $18.5 million from over 90 investors by, among other things, falsely overstating Trustify’s financial performance. Despite representing to investors that their funds would go towards operating and growing Trustify’s business, Boice diverted at least $3.7 million for his own benefit and to fund his lifestyle. This included the purchase of a home in Alexandria, Virginia, travel by private jet, and furnishing a seaside vacation home.
The FBI’s Washington Field Office is investigating the case. Trial Attorney Blake Goebel of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Russell Carlberg of the Eastern District of Virginia are prosecuting the case.
Individuals who believe they may be a victim in this case should contact the Victim Witness Services Unit of the U.S. Attorney’s Office for the Eastern District of Virginia at 703-299-3700 for more information.