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.
A First for ACFD — “A veteran firefighter in Arlington County, Virginia, is breaking barriers as she rises through the ranks. Tiffanye Wesley is the first African American woman named deputy fire chief in all of Northern Virginia.” [NBC 4]
County Wants Feedback on Camera Policy — ” The Arlington County Police Department, Sheriff’s Office and Fire Marshals’ Office are seeking the public’s input and feedback on draft Digital Evidence Management System policies, regulating digital audio and video recordings captured by body worn cameras, in-car cameras, and interview room cameras.” [Arlington County]
Guilty Plea in Murder Case — “Jose Angel Rodriguez-Cruz, 54, pleaded guilty in Stafford County Circuit Court on Monday morning in the killing of 28-year-old Marta Haydee Rodriguez, who was last seen walking to a bus stop in Arlington, Virginia, in April 1989.” [WTOP, Washington Post]
Vehicle and Business Break-ins — Arlington County police are investigating a pair of business burglaries in the Rosslyn area, and series of vehicle break-ins in the Barcroft neighborhood, according to Monday’s crime report. [ACPD]
Gov. Backs Marijuana Legalization — “Governor Ralph Northam today announced that he will introduce and support legislation to legalize marijuana in the Commonwealth of Virginia. The announcement comes as the Northam Administration prepares to release a report on the impact of legalizing adult-use marijuana.” [Commonwealth of Virginia]
Amazon Order Boosts 23rd Street — “By early May, more than 400 meals a day were leaving the Freddie’s kitchen and reaching firefighters, police, hospitals, and area residents in low-income housing… Due to the size of Amazon’s order, he enlisted a dozen other nearby restaurants. This joint effort ‘breathed life, energy, and activity into the independent restaurants that make up the core of 23rd Street.'” [Amazon]
Reopening Groups Blast Teachers — “Our coalitions of over 5,300 parents, teachers and Northern Virginia residents unite today to express dismay and concern of the latest efforts by a group of Northern Virginia education associations pushing Governor Northam to remove the option for in-person school for all of Virginia’s children.” [Arlington Parents for Education]
Local Districts Pause Reopening — “As COVID-19 cases surge, Fairfax County Public Schools will delay bringing back early HeadStart, pre-K and kindergarten students, plus some students who receive special education services… [and] Falls Church City Public Schools announced Tuesday that they will temporarily ‘pause’ in-person learning for the week of Thanksgiving.” [NBC 4, InsideNova, Washington Post]
Photo courtesy Dennis Dimick
(Updated at noon) The Arlington County Circuit Court rejected a plea bargain that would place a Maryland man on two years of probation for allegedly bringing 50 pounds of marijuana and 400 cartridges of hashish oil into the county.
The suspect is accused of arriving on a flight to Reagan National Airport in November 2018 with a checked bag stuffed with drugs. He was arrested by the Metropolitan Washington Airports Authority at baggage claim.
Commonwealth’s Attorney Parisa Dehghani-Tafti and the attorney representing the alleged drug carrier agreed that the defendant would plead guilty to two felony charges and be placed on probation, wrote the presiding judge. After completing the probation and 200 hours of community service, he would be able to withdraw the pleas to the felony charges and instead plead guilty to two misdemeanor charges while having a $100 fine imposed but then suspended.
Judge Daniel Fiore, II, in a memorandum of opinion that was obtained by ARLnow, said the punishment would not deter the defendant, or anyone else, from carrying large amounts of drugs into Virginia for distribution.
“Virginia jurisprudence has long and consistently recognized deterrence as means for a court to determine an appropriate sentence, no matter the criminal statute violated,” Fiore wrote. “Deterrence disincentives unlawful behavior both for the individual and for society.”
Excerpts of Fiore’s opinion were published in late September in Virginia Lawyers Weekly. A call to judge’s chambers was not returned. Dehghani-Tafti told ARLnow that she could not comment on the case at this point.
This rejected bargain is part of a larger theater taking place across the nation, as some prosecutors are changing their approach to drug crimes and judges are fighting back. The tug-of-war reached Virginia Gov. Ralph Northam, who signed a law last month that would require judges to dismiss charges when both the prosecution and defense agree to a bargain or deal.
Fiore wrote that he rejected the bargain in part because the prosecution and defense had understated how much marijuana and hashish the defendant had. The amounts, once disclosed, merited prison sentences between five and 40 years and fines of up to $500,000, Fiore wrote.
Focusing on the quantity of drugs strikes Public Defender Brad Haywood as a bit naive, considering the defendant was likely a low-level “drug mule” put in a high-risk situation by higher-level drug traffickers. He might not have known the quantity of drugs he was carrying, as mules often do not, Haywood said in an email, adding that mules are often thought of as victims of drug trafficking.
“They are under duress; fearful for their safety, desperate for money, or desperate to feed their own addictions,” he said. “They are easy to manipulate precisely because they are suffering. They can even be pressured into doing something as irrational as traveling on a plane with tons of narcotics.”
Given the risk involved, mules are often caught, Haywood said. Instead of harshly prosecuting mules, however, the government frequently offers them leniency so they can help apprehend the supplier.
A 34-year-old D.C. man dubbed the “Beltway Bank Bandit” has pleaded guilty to charges connected to his use of a gun in three robberies, including one in Arlington.
Federal prosecutors say Freddie Lee McRae brandished a firearm when robbing a Wells Fargo branch and a Burke & Herbert branch, both in Alexandria, in late 2018. He also brandished a pistol on April 21, 2019, when he robbed the Legend Kicks and Apparel store on Columbia Pike in Arlington, prosecutors say.
McRae’s getaway vehicle was spotted by police after that robbery, leading to a chase on the GW Parkway that ended up with the car in the Potomac River and McRae unsuccessfully trying to swim to freedom.
“McRae pleaded guilty to three counts of brandishing a firearm during and in relation to a crime of violence,” the U.S. Attorney’ Office for the Eastern District of Virginia said in a press release Tuesday evening. “He faces up to life in prison and a mandatory minimum of 21 years in prison when sentenced on Feb. 23, 2021.”
In addition to the three robberies for which he pleaded guilty on Tuesday, McRae also admitted to several other bank robberies, as well as the attempted robbery of a Capital One Bank branch in February 2019, prosecutors say.
The full press release is below.
A 29-year-old Arlington resident has pleaded guilty to a multi-million dollar healthcare fraud.
Federal prosecutors charged Onkur Lal with bilking Medicaid, Medicare and the TRICARE military health care system out of $3.5 million by submitting fraudulent bills for non-existent prescriptions while working at a trio of local pharmacies.
Prosecutors say Lal conspired with the owner of the pharmacies in carrying out the fraud from 2014 to 2019. After the guilty plea, Lal now faces up to five years in federal prison.
More from the U.S. Attorney’s Office for the Eastern District of Virginia:
An Arlington man pleaded guilty yesterday to his role in a conspiracy to commit health care fraud that resulted in losses of over $3.5 million.
According to court documents, Onkur Lal, 29, worked in various roles at MedEx Pharmacy, MedEx Health Pharmacy, and Royal Care Pharmacy, which were all owned and operated by the same individual. From around 2014 to around 2019, Lal conspired with the owner and others in a number of different fraudulent schemes to defraud health care benefit programs, including TRICARE, Medicare, Virginia Medicaid, and Maryland Medicaid. Lal took part in a number of fraudulent schemes, including generating false prescriptions, billing health insurance companies for prescriptions that were never filled, and billing patients’ health care benefit programs for numerous high cost medications that he and his co-conspirators knew were not prescribed and/or never received.
Lal and his conspirators also submitted false invoices under the names of other pharmacies, in an attempt to circumvent audits. Further, Lal and another co-conspirator fraudulently posed as pharmacists by elevating their title and credentials within the pharmacy’s prescription software system. Lal and his co-conspirator then used these elevated titles to verify prescriptions, which they then submitted to health care benefit programs and pharmaceutical suppliers for payment. The various schemes resulted in health care benefit programs losing more than $3.5 million.
Lal is scheduled to be sentenced on Feb. 21, 2021, and faces a maximum penalty of five years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services (HHS); James A. Dawson, Special Agent in Charge of the FBI Washington Field Office Criminal Division; and Dermot F. O’Reilly, Deputy Inspector General for Investigations with the Defense Criminal Investigative Services, made the announcement after Senior U.S. District Judge Claude M. Hilton accepted the plea.
Assistant U.S. Attorneys Monika Moore, Carina A. Cuellar, and Jamar K. Walker are prosecuting the case.
Flickr photo by Joe Gratz
Changes at Prosecutor’s Office — Arlington Commonwealth’s Attorney Parisa Dehghani-Tafti has announced a reorganization of her office to implement a “vertical prosecution” model. The new structure “requires that one prosecutor be assigned to each case from start to finish; it permits the assigned attorney to work early and closely with law enforcement, victims, witnesses, and defense attorneys.” The office has also recently stopped its courtroom involvement with certain types of minor traffic offenses. [Press Release, Twitter]
Man Pleads Guilty to Arlington Carjacking — “A Washington, D.C. man pleaded guilty today to his role in an armed robbery and carjacking that led to a high-speed police chase and resulted in injuries to two police officers. According to court documents, Jovan Doir Johnson, 30, together with another individual, obtained a stolen vehicle at gunpoint in Arlington and then used it to rob a 7-Eleven in Lorton.” [Dept. of Justice]
Board Approves CIP, Bond Referenda — “The Arlington County Board today voted unanimously to adopt a scaled-down $277.5 million one-year Capital Improvement Plan that focuses on continuing or completing projects already underway and beginning a 10-year program to improve the County’s stormwater infrastructure and flood resiliency… In a related action, the Board unanimously approved bond referenda totaling $144.454 million to be put before the voters on the November ballot.” [Arlington County, Washington Post]
Board to Hold Closed COVID Meeting — “Notice is hereby given that the County Board of Arlington Co., VA, on Thursday, July 23, 2020 at 5:30pm, or as soon thereafter as matters may be heard, in accordance with and for the purposes authorized by law will meet to discuss matters related to the County’s response to the COVID-19 pandemic.” [Arlington County]
Pandemic May Cause Hunger Crisis — “Up to a quarter of a million people in the Washington area could be thrown into hunger because of the novel coronavirus pandemic, according to a report by the Capital Area Food Bank, even as the amount of donated food and the number of distribution sites plummet precipitously.” [Washington Post]
Flickr pool photo by Vincent
Special County Board Meeting Planned — On Thursday at 6 p.m., the Arlington County Board “will hold a special meeting for a listening session on racial justice, systemic racism and policing. The County Board special meeting will be conducted using electronic means.” [Arlington County]
County Commissions Still Mostly Inactive — “Faced with a growing rebellion over the lack of meetings by Arlington government advisory panels, County Board members and top staff on June 13 offered (slightly defensive) apologies – but not much of a roadmap forward. Board members were responding to a June 9 letter sent to them by 25 chairs of advisory groups, complaining that the local government has been lagging in re-starting meetings that largely have been on hold since the COVID-19 pandemic struck in March.” [InsideNova]
Pandemic Affects College Plans — From a 60 Minutes segment on Sunday: “The struggle extends to those already in college who are laboring to pay tuition and are weighed down by debt like 20-year-old Katherine Trejo of Arlington, Virginia. The daughter of a single mom from Bolivia, Katherine was supposed to graduate from George Mason next year. She is the first person in her family to attend college.” [CBS News]
Summer School Registration Underway — “Registration for distance learning secondary summer school is underway. Elementary students who qualify to participate in the Elementary Summer Learning Program will automatically be registered by APS.” [Arlington Public Schools]
Guilty Plea in Case Involving Arlington Company — “A former Arlington business executive pleaded guilty today to embezzling nearly $8 million that was intended to settle claims by children who alleged they were victims of medical malpractice. According to court documents, Joseph E. Gargan, 59, of Round Hill, was the Chief Executive Office of the Pension Company, Inc., an Arlington business that would execute settlement agreements entered into between civil litigants.” [Dept. of Justice]
ARLnow Operating Remotely — Since the first confirmed local coronavirus case in March, ARLnow’s employees have been working from home. We plan to continue working remotely until 2021, and may continue to have most employees work remotely most of the time after that. [Washingtonian]
HQ2’s Employee Count Keeps Growing — “Amazon.com Inc.’s Arlington headquarters seems to get larger by the week. At latest count, there are just shy of 715 employees in leased office spaces in Crystal City and about 125 pending starts.” [Washington Business Journal]
MS-13 Members Plead Guilty to Shooting — “Two MS-13 members pleaded guilty today to their respective roles in a December 2018 shooting and stabbing that occurred in Four Mile Run Park on the border of Alexandria and Arlington. According to court documents, Juan Francisco Rivera-Pineda, 25, and Jefferson Noe Amaya, 24, both Alexandria residents… confronted the victim in the park, shooting him in the throat and arm, and stabbing him in the back. The victim was transported to the hospital where he underwent surgery and survived.” [USDOJ]
Pentagon Suspect Was Out on Bail — “Matthew Richardson, who is facing charges in Arlington, Va., after police say he tried to blow up a car in a Pentagon parking lot, was released from the Washington County jail in December after The Bail Project posted his bond.” [Arkansas Democrat Gazette]
Vaping Is Prevalent in Arlington Schools — “Sneaking doses from e-cigarettes or, ‘juuling,’ has emerged as ‘the No. 1 offender at Arlington Public Schools,’ according to substance abuse counselor Jenny Sexton, speaking at the Feb. 12 exploration of the hot topic at the Arlington Committee of 100… It’s a tricky discipline challenge, said Sexton, who is “stretched thin” counseling populations at 24 elementary schools and two Arlington middle schools.” [Falls Church News-Press]
Strong Primary Absentee Voting Turnout — “Former Arlington County, VA Treasurer Frank O’Leary: ‘A new record has been set in Arlington for absentee voting in a Presidential primary. In fact, over the last seven days an amazing 1,722 absentee votes have occurred – 61 percent in person.'” [Blue Virginia, Twitter]
Beyer Campaigning for Mayor Pete — “As Pete Buttigieg struggles for momentum going into the South Carolina Democratic primary and Super Tuesday, two members of Congress from the Washington region are traveling the country to promote his presidential campaign. Reps. Don Beyer (D-Va.) and Anthony G. Brown (D-Md.) were early endorsers of the 38-year-old former mayor of South Bend, Ind., who they say has the personal story and calm demeanor to unite a nation divided by Donald Trump’s presidency.” [Washington Post]
Another School Boundary Process Coming — “It might go well, or it might be the civic-engagement equivalent of a bloodbath. But either way, Arlington school leaders are about to embark on a new round of rejiggering elementary-school boundaries.” [InsideNova]
Fire Station 8 Contract Approved — “The Arlington County Board today approved a $16.1 million construction contract and a concept design for a new, energy-efficient, four-bay station to replace the obsolete Fire Station No. 8 at 4845 Lee Highway. The new fire station will better serve the community while honoring Fire Station No. 8’s long history.” [Arlington County]
Local Man Pleads Guilty to Campaign Finance Violations — “An Arlington political consultant who served as the treasurer of multiple Political Action Committees (PACs) pleaded guilty today to lying to the Federal Election Commission (FEC) about approximately $32,500 in payments of PAC money that he directed to himself and a close friend.” [Press Release]
Run With a Running Legend Friday — Updated at 2:45 p.m. — “Kathrine Switzer, who in 1967 became the first woman to officially run the Boston Marathon – wearing bib number 261 – and is the founder of the global non-profit 261 Fearless, will be in Arlington this Friday to run with the 261 Fearless Club DC Metro/VA. The short, easy run will begin at 5:30 p.m. at the U.S. Marine Corps War Memorial in Arlington. It is free and open to the public; all are invited.” [Press Release]
ACPD Celebrates Accreditation — “The Arlington County Police Department has received its Initial Accreditation from the Virginia Law Enforcement Professional Standards Commission (VLEPSC). The announcement comes following an intensive on-site assessment, which took place in April 2019.” [Arlington County]
Notable Local Candidate Endorsements — The website Greater Greater Washington has endorsed a number of Arlington candidates, including Del. Alfonso Lopez for the 49th House of Delegates district, Christian Dorsey and Katie Cristol for County Board, and Parisa Dehghani-Tafti for Commonwealth’s Attorney. Additionally, Cristol has endorsed Dehghani-Tafti. [Greater Greater Washington, Twitter]
A pharmacy owner with stores in Arlington and Alexandria has been sentenced to four years behind bars for falsifying insurance claims and illegally dispensing opioids.
Latif Mohamed Chowdhury, 29, was sentenced to prison on Friday after law enforcement accused him of running a get rich quick scheme by billing insurance companies for prescriptions he never filled, and in some cases, were never prescribed by a doctor to the patient. Officials say Chowdhury, who did not have a pharmacy license, dispensed medications and billed insurance companies at his two pharmacies between August 2015 and February 2016 using identities he had stolen from licensed pharmacists.
“Chowdhury blithely violated his position of trust,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, in a statement last week.
Federal prosecutors said Chowdhury pocketed $500,000 from his fraudulent billing and illegally dispensed “a significant number” of opioid and other medications.
Officials also said in the course of their investigation they found Chowdhury had given opioids to seven-year-old children “outside the usual course of professional practice.”
While searching one of the pharmacies, officials said they found Chowdhury had left a loaded Colt .38 revolver on one of the store’s shelves.
The Arlington pharmacy (called ACP-2) was located at 611 S. Carlin Springs Road, at the Virginia Hospital Center campus that is being acquired by Arlington County in a land swap. The Alexandria pharmacy (ACP-1) was located at 8330 Richmond Highway.
“Although one of Chowdhury’s family members owned ACP-2, Chowdhury in fact operated, managed, directed, and controlled ACP-2 from in or around January 2015 through in or around February 2016. ACP-2 was shut down for business in March 2016,” Matthew Nestopoulos, spokesman for the U.S. Attorney’s Office, told ARLnow.
On his LinkedIn, Chowdhury listed experience working in information technology — including eight months at the Pentagon — before leaving the field and opening the two pharmacists.
“In 2013 I began to venture towards opening a business and work alongside my career to grow Alexandria Care Pharmacy which has now been successfully operating for two years,” he wrote.
His most recent post included a call to hire “full-time background investigators” for a new business venture.
“We are committed to protecting the public and the people of Virginia,” said Jesse R. Fong, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division. “We will continue to track down and bring to justice criminals who are fueling the opiate crisis at every level including pill writers, pill fillers, and drug dealers in the area.”
Friday’s sentencing came after Chowdhury pled guilty in July.
Flickr photo by Joe Gratz