An Arlington doctor’s office was the hub of a “decade-long oxycodone distribution network,” federal prosecutors say.
A Front Royal woman who authorities say was the “ringleader” of the scheme, which prescribed tens of thousands of pills between 2012 and 2022, pleaded guilty Monday. Candie Marie Calix, 40, could face up to 20 years in prison at her scheduled sentencing on September 28.
Two co-conspirators in the opioid prescription ring, both from Front Royal, previously pleaded guilty and are also set to be sentenced in September.
The Arlington physician for whom Calix “nominally worked as an office manager” was not named and it’s unclear whether they will face charges or other disciplinary action. The case is being handled by the U.S. Attorney’s Office for the Eastern District of Virginia.
The Arlington County Police Department reported 92 opioid overdoses in 2021, including 28 that resulted in death.
More from a U.S. Dept. of Justice press release, below.
A Front Royal woman pleaded guilty today to being the ringleader of a decade-long oxycodone distribution network, sourcing high-dosage oxycodone pills from a doctor in Arlington.
According to court documents, Candie Marie Calix, 40, nominally worked as an office manager for a physician in Arlington, referred to in court records as Doctor-1. Between 2012 and 2022, Doctor-1 prescribed Calix nearly 40,000 oxycodone 30-mg pills and more than 9,000 oxycodone 15-mg pills. Doctor-1 also prescribed similar quantities of oxycodone 30-mg and 15-mg pills to Calix’s relatives, including her mother, grandparents, great-grandmother, brother, and husband. These quantities were far in excess of therapeutic doses, and Calix personally distributed or directed others to distribute most of the pills that Doctor-1 prescribed to Calix and her family members.
Calix functioned as the gatekeeper to Doctor-1; she recruited individuals she knew from around Front Royal to be “patients” of Doctor-1 and obtain large quantities of oxycodone. These “patients,” in turn, typically kicked back the oxycodone 30-mg pills they were prescribed to Calix to redistribute, and kept the oxycodone 15-mg pills for their own use. Calix recruited at least 12 individuals to be “patients” of Doctor-1.
Calix and her co-conspirators used coded language to refer to the pills they distributed, for example, referring to oxycodone 30-mg pills as “tickets,” “blueberries,” or “muffins.” The co-conspirators typically sold oxycodone 30-mg pills at a cost of $25 per pill, and over the course of the conspiracy, generated at least $5,000 per month in profits.
Two of Calix’s co-conspirators, Kendall Sovereign, 56, and Jessica Talbott, 35, both of Front Royal, also pleaded guilty to their involvement in the conspiracy. Sovereign and Talbott are both scheduled to be sentenced on September 21.
Calix is scheduled to be sentenced on September 28. She faces a maximum penalty of 20 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.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal Division, made the announcement after Senior U.S. District Judge Anthony J. Trenga accepted the plea.
Assistant U.S. Attorney Katherine E. Rumbaugh is prosecuting the case.
Militia members brought “firearms, ammunition, and related items” to the hotel in advance of Jan. 6, federal prosecutors say. Some details of the hotel’s unwitting role in the insurrection were previously reported. Surveillance photos from the hotel show large gun cases being wheeled in on luggage carts.
Indictments against militia members for “seditious conspiracy,” unsealed last week, outline how some militia members stayed outside of D.C. that day, awaiting orders to transport weapons to the city. They used encrypted chat apps and ham radios to communicate, federal prosecutors said.
“While certain Oath Keepers members and affiliates breached the Capitol grounds and building, others remained stationed just outside of the city in quick reaction force (QRF) teams,” said a Justice Department press release. “According to the indictment, the QRF teams were prepared to rapidly transport firearms and other weapons into Washington, D.C., in support of operations aimed at using force to stop the lawful transfer of presidential power.”
In one indictment, the Comfort Inn, located along N. Glebe Road near the entrance to I-66, is referred to by militia members as the “QRF hotel.” It was apparently not the only one. The indictment also shows militia members discussing “several well equipped QRFs outside DC.”
Oath Keeper member and Phoenix resident Edward Vallejo, who is among those charged with seditious conspiracy, was one of the people who stayed behind in Ballston while violence at the Capitol raged, prosecutors say. From the indictment:
Vallejo and others were on standby at the Comfort Inn Ballston, monitoring communications from the co-conspirators on the ground inside Washington, D.C., and awaiting a call to bring the weapons to the co-conspirators.[…]
At 2:38 p.m., Vallejo messaged the Leadership Signal Chat, “QRF standing by at hotel. Just say the word…”
That night, as Congress resumed its counting of the electoral votes, Vallejo and other militia members “met at a restaurant in Vienna, Virginia to celebrate their attack on the Capitol and discuss next steps,” according to federal prosecutors. There’s no indication that the weapons ever left the hotel that day.
There is also no word in Justice Department filings about potential militia activities elsewhere in Arlington. ARLnow previously reported on a group of 8 to 10 men who gathered at the Iwo Jima memorial with communication equipment while the Capitol was attacked, but there is no indication that any of them has been accused of a crime.
Vallejo is being held in custody pending a detention hearing this week, the Washington Post reported.
Photo via Google Maps
The Alexandria man whose drugs led to a local woman’s death is expected to spend at least a decade in prison.
Prosecutors announced this morning that 29-year-old Kibruysday Degefa, accused of distributing the fentanyl-laced drugs that caused the overdose death of a 20-year-old woman in Arlington, was convicted on an array of charges by a jury in Alexandria federal court.
Arlington County Police Chief Andy Penn helped to make the announcement. Degefa is set to be sentenced in February and is facing a 10 year mandatory minimum sentence.
A press release from the U.S. Attorney’s office for the Eastern District of Virginia is below.
A federal jury convicted an Alexandria man yesterday on charges of conspiracy, possession, and distribution of fentanyl and Eutylone, and being a felon in possession of a firearm during drug trafficking.
According to court records and evidence presented at trial, from in or around June 2020, through at least December 2020, Kibruysday Degefa, 29, conspired with others to distribute counterfeit, pressed pills containing fentanyl, as well as Eutylone, which is a designer drug similar in character to MDMA. Pills distributed by the conspiracy twice on December 20, 2020, contributed to the mixed drug overdose death of a 20-year-old female in Arlington, whose blood was later determined to contain fentanyl. A search warrant on the hotel room where Degefa was staying at the time revealed additional narcotics for distribution, including Eutylone, along with multiple firearms concealed in the bathroom ceiling tiles. Degefa was previously convicted of robbery in Alexandria in 2015.
Degefa faces a mandatory minimum of 10 years in prison when sentenced on February 18, 2022. 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.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Andy Penn, Arlington County Chief of Police; Jarod Forget, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Division; Colonel Gary T. Settle, Superintendent of Virginia State Police; and Charlie J. Patterson, Special Agent in Charge of the ATF’s Washington Field Division, made the announcement after U.S. District Judge Liam O’Grady accepted the verdict.
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.
A federal grand jury has indicted an Arlington lawyer on charges related to paying underage girls for sex.
Matthew Erausquin, 46, was arrested in November after a 1.5-year-long investigation. He was charged in Alexandria federal court with sex trafficking minors, producing child pornography, and charges related to transporting or forcing victims to cross state lines for sex.
If convicted, he faces between 15 years to a lifetime in prison, although sentences for federal crimes are typically shorter than the maximum penalties, the U.S. Attorney’s Office for the Eastern District of Virginia said in a press release.
“The defendant allegedly used his money and power to sexually exploit minors,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “We remain steadfast in our commitment to holding accountable those who prey on and victimize children, and to seeking justice for society’s most vulnerable members.”
Court documents allege that Erausquin paid for sex with six underage girls and three young adults over three years. During that time, the documents say he secretly recorded some of his encounters.
He allegedly met some of the girls on Seeking Arrangement, a website where men seek younger partners looking for financial help. In other instances, prosecutors say he posed as an 18 or 19-year-old on the dating app Tinder.
“Erausquin lured the girls into commercial sex arrangements, paying the girls between $500 to $800 each per sexual encounter and offering to pay at least $1,000 for threesome sexual activity,” said the Eastern District of Virginia U.S. Attorney’s Office. “In addition to these payments, Erausquin gave the girls marijuana and expensive gifts, such as [Tiffany & Co.] purses.”
According to a Fairfax County police affidavit, the investigation began in 2019, after a high school student reported to police that a man in his 40s had paid two victims $1,000 for a threesome, Virginia Lawyers Weekly previously reported.
One girl alleges that she “passed out after taking a hit of marijuana at Erausquin’s Arlington apartment, then woke up with no clothes on,” according to the Washington Post. Some were lured to the area from out of town with first-class plane tickets purchased by Erausquin, the Post also reported.
According to an affidavit, some underage victims told police that he likely knew they not yet 18.
Erausquin was a founding partner of the Alexandria office of the firm Consumer Litigation Associates. CLA has since removed his office from its list of locations.
Flickr photo by Joe Gratz
A man who terrorized businesses in Arlington, Alexandria and elsewhere from 2018 to 2019 is going to prison.
Freddy Lee McRae, 35, pled guilty to a series of bank and retail robberies last year. On Tuesday McRae, dubbed the “Beltway Bank Bandit,” was sentenced to 21 years in federal prison.
“This case involved a chilling armed robbery spree during which innocent community members were threatened with serious injury or death if they did not comply with repeated demands for money,” Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia, said in a statement. “We are thankful to our law enforcement partners for their thorough investigation across multiple jurisdictions to bring the defendant to justice.”
As detailed in a press release, McRae’s crime spree included the attempted robbery of a Capital One branch on Columbia Pike, the armed robbery of Legend Kicks & Apparel on the Pike, and a subsequent police chase on the GW Parkway that ended with McRae crashing his car into the river and trying to swim to freedom.
On December 10, 2018, McRae robbed a Burke & Herbert bank branch located in Alexandria. McRae approached a teller, who asked if he wanted to make a deposit. McRae responded, “gimmie your money,” before lifting up his shirt and pulling a pistol from his waistband, which he pointed at the teller. As the teller gathered money, McRae racked the slide on the pistol and demanded all large bills. McRae fled with approximately $1,366 in cash.
On April 21, 2019, McRae robbed the Legend Kicks & Apparel store located in Arlington. McRae brandished a pistol and demanded that two store employees empty their pockets, which they did. McRae then ordered the employees to lie on the floor before taking approximately $2,160 in cash that belonged to the store. McRae fled the store on foot and the area by vehicle. When a law enforcement officer tried to pull over the vehicle, McRae stopped only briefly before leading law enforcement officers on a vehicle pursuit on the George Washington Memorial Parkway. McRae ultimately jumped out of his moving vehicle prior to it crashing and sinking into the Potomac River. McRae tried to flee law enforcement by jumping into the river, but officers pulled him out and placed him under arrest.
As part of his guilty plea, McRae also admitted to robbing a Bank of America branch in Springfield on October 27, 2018; a BB&T branch located in Alexandria on December 20, 2018; and a Capital One branch located in Bowie, Maryland, on January 2, 2019. McRae further admitted to attempting to rob a Capital One branch located in Arlington on February 11, 2019, and to obstructing justice following his apprehension.
“This case was investigated by the FBI Washington Field Office’s Northern Virginia Violent Crime Safe Streets Task Force, which is composed of FBI Special Agents and Task Force Officers from northern Virginia law enforcement agencies,” the press release noted. “Significant investigative assistance in this case was provided by the Arlington County Police and the Fairfax County Police.”
After two-and-a-half years on the job, G. Zachary Terwilliger will step down this month as the U.S. Attorney for the Eastern District of Virginia.
Terwilliger, who has a close relationship with former U.S. Attorney General William Barr, told the Washington Post that the recent election of Joe Biden as president had consequences and that he preferred to leave his post voluntarily.
His last day is Friday, Jan. 15, after which he will join the Texas-based firm Vinson & Elkins LLP as a partner in its D.C. office. The Eastern District’s First Assistant Attorney, Rah Parekh, will take over in an acting capacity until the role is officially filled.
“It has been the honor of honors to be in the arena with so many dedicated individuals in the pursuit of justice, and I feel so fortunate to conclude my service as the United States Attorney in the district where it all began,” Terwilliger said in a prepared statement.
An Alexandria resident, Terwilliger led a staff of more than 250 personnel in the Eastern District, which prosecuted high-profile cases of national interest and oversaw investigations throughout Northern Virginia, Richmond, Hampton Roads and Tidewater. His work included charging ISIS militants known as “The Beatles” with murder, overseeing a massive heroin and fentanyl bust that put 35 people behind bars, and putting 11 MS-13 gang members in connection with the murder of two juveniles in Fairfax County behind bars.
Regina Lombardo, the deputy director of the Bureau of Alcohol, Tobacco, Firearms and Explosives, commended Terwilliger as a “driving force” behind the Department of Justice’s enforcement of federal firearms laws.
“U.S. Attorney Terwilliger’s partnership with ATF’s Washington Field Division has been nothing short of extraordinary, and the Eastern District of Virginia is a safer place because of him,” Lombardo said. “I sincerely wish him all the best in his next endeavor.”
Terwilliger’s career began as an intern for the Eastern District in 1999. A graduate of the William & Mary School of Law, he was appointed a Special Assistant U.S. Attorney in 2008. He was hired as an Assistant U.S. Attorney two years later, and then spent the next eight-plus years prosecuting cases until he was named by Attorney General Jeff Sessions as the acting Attorney for the Eastern District of Virginia in May 2018. His appointment was later confirmed in the Senate, and was supported by Virginia Senators Tim Kaine and Mark Warner.
Terwilliger’s father was a former United States Deputy Attorney General and acting United States Attorney General. George J. Terwilliger III succeeded Barr as Deputy Attorney General after being nominated to the position in 1992.
Photo via U.S. Department of Justice
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
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]
A federal judge sentenced Pascal Laporte to four years in prison today, the U.S. Attorney for the Eastern District of Virginia announced this afternoon.
Prosecutors say Laporte thought he was buying two kilograms of cocaine from a Mexican cartel for $50,000, but was in fact meeting with undercover Fairfax County Police detectives. They say that Laporte planned to sell the cocaine and promised future purchases of up to 100 kilograms.
More from a press release, via the U.S. Attorney’s Office:
An Arlington man was sentenced today to nearly four years in prison for his role in purchasing 2 kilograms of cocaine from undercover detectives.
According to court documents, Pascal Laporte, 40, intended to purchase 2 kilograms of cocaine from undercover Fairfax County Police detectives who purported themselves as members a drug cartel based in Mexico. For over a year, Laporte expressed to a confidential source his need for a cheaper supplier of cocaine who could provide him with kilogram quantities. Laporte first met the undercover detectives in early August 2018 at a restaurant in Tysons Corner, to discuss pricing per kilogram and the quantity Laporte desired. Laporte told the undercover detectives it would take him a week to sell off 1 kilogram of cocaine.
In the weeks leading up to his arrest, Laporte communicated with the CS his desire to start with the purchase of 2 kilograms of cocaine, and if the arrangement went well, he would then purchase 10 kilograms, and then upwards of 100 kilograms per month. Laporte even traveled to Miami with the intention to find a means to transport the cocaine himself to the Northern Virginia area in an effort to obtain the cheapest price per kilogram. Laporte was arrested in August 2018 as he was inspecting the cocaine that he was to purchase. He brought $45,000 to the meeting, as partial payment for the 2 kilograms.
Arlington resident Todd Hitt, the founder of Falls Church-based Kiddar Capital, has pleaded guilty to a massive, Ponzi-like fraud scheme.
Federal prosecutors say Hitt, “solicited approximately $30 million from investors for a variety of real estate and venture capital investments,” but used much of the money “for personal spending to support an extravagant lifestyle and new investor’s funds used to pay off old investors.”
“Hitt’s fraudulent conduct resulted in investor losses of approximately $20 million,” said the U.S. Attorney’s Office for the Eastern District of Virginia.
Before his October arrest by the FBI, Hitt was developing a new company headquarters in Falls Church. A member of a prominent local commercial real estate family, Hitt made headlines as a young housing developer in the 1990s for clashing with Arlington neighbors while building what residents dubbed “McMansions.”
More on the guilty plea, and Hitt’s future sentencing, from the U.S. Attorney’s Office:
An Arlington man pleaded guilty today to orchestrating eight fraud schemes that resulted in total losses of approximately $20 million.
According to court documents, Todd Elliott Hitt, 54, solicited approximately $30 million from investors for a variety of real estate and venture capital investments in the Washington, D.C. area from 2014 through August 2018. The investments included Hitt’s solicitation of approximately $17 million from investors in order to purchase a five-story office building adjacent to a planned future stop on the Silver Line in Herndon. Hitt made false statements and material omissions to investors by failing to disclose that a significant portion of the monies raised were commingled with other unrelated investment projects, used for personal spending to support an extravagant lifestyle and new investor’s funds used to pay off old investors in a Ponzi-like scheme. Hitt’s fraudulent conduct resulted in investor losses of approximately $20 million.
Hitt pleaded guilty to a charge of securities fraud in and faces a maximum penalty of 20 years in prison and a fine of $5 million or twice the gross gain or loss, whichever is greater. He is scheduled to be sentenced on June 21. 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, and Matthew J. DeSarno, Special Agent in Charge, Criminal Division, FBI Washington Field Office, made the announcement after U.S. District Judge Leonie M. Brinkema accepted the plea. Assistant U.S. Attorney Mark D. Lytle is prosecuting the case.
Photo via YouTube