After allegedly flouting federal bond conditions and moving millions of dollars through personal accounts, family members and a pair of Las Vegas casinos, local developer Billy G. Jefferson Jr. is back in a Hanover jail as he awaits sentencing for tax credit fraud.
Details of Jefferson’s arrest on Feb. 14 – his second in 10 months related to a tax credit fraud case – were made public after a hearing Friday in Richmond federal court and after his bond was revoked.
Jefferson pleaded guilty in December to defrauding the state and federal tax credit systems. He was allowed to remain free on bond to give him a chance to raise the almost $13 million he agreed to pay in restitution. But federal prosecutors say Jefferson has failed to make any restitution.
“The United States has lost complete faith in the defendant’s ability to participate in this process,” U.S. District Attorney Michael Gill said in court Friday.
U.S. Marshals arrested Jefferson at his home Feb. 14 on charges of violating the conditions of his federal bond agreement, which, among other provisions, requires him to report to the IRS any real estate or monetary transfer in excess of $25,000.
Jefferson has since August 2013 wired almost $4.5 million from foreign accounts to himself, close associates and Las Vegas casino players’ accounts, prosecutors alleged in a Feb. 12 court filing. More than $500,000 worth of those transfers came after Jefferson’s Dec. 19 guilty plea.
Court records show $300,000 in wire transfers from a foreign account to Jefferson’s former wife in the four days following his plea hearing – the date when the bond deal took effect.
The same records show 11 more transfers, eight to an account under Jefferson’s name and three more to his former wife, for amounts of $25,000 and $24,500, just under the bond-mandated reporting threshold.
“The defendant has not reported a single one of these red flag transactions to the IRS and he has yet to pay a single dime towards his restitution in this case,” the motion for bond revocation reads.Federal prosecutors also allege that Jefferson might have squeezed in an unauthorized trip to Las Vegas in violation of his bond agreement on previous state charges. A list of cash transaction reports shows Jefferson made 24 withdrawals from a Wells Fargo bank, the Aria Resort and Casino, and the Bellagio Hotel and Casino, all in Las Vegas, on dates ranging from Nov. 15, 2013, to Dec. 16, 2013.
Records detailing the transactions had been sealed until Friday “due to concerns about the defendant’s flight and continued concealment of assets.”
The Feb. 12 motion says two confidential sources told federal law enforcement officials that Jefferson had been frittering away assets to family members and associates in fall 2013.
The court file also includes an anonymous letter advising authorities to “check for hidden assets such as art work, etc.” at the home of Jefferson’s former wife.
Chuck James, a Williams Mullen attorney representing Jefferson, would not confirm or deny any of the specific accusations in the prosecutor’s filing, saying the defense is working on its own investigation into the alleged bond violations.
“We look forward to an opportunity to address the allegations at an appropriate time. It was premature to do so today,” James said.
James said that the defense has worked to cooperate with investigators in the week since Jefferson’s latest arrest and that it will continue to do so. He said it is still Jefferson’s intent to pay the court-ordered restitution by selling off real estate. Jefferson has paid a $750,000 forfeiture that was included in his guilty plea on top of the restitution amount.
Jefferson owns more than 40 Richmond properties – assessed at a total of more than $70 million – but had not sold any of those holdings between his sentencing and Friday’s hearing. He did unload a Monument Avenue house next to his own home at Monument and Boulevard in September 2013.
According to court records, Jefferson reported to the IRS a proposed sale of a property at 25 N. Boulevard, claiming the transaction involved a pending offer of $15 million for an 11,000-square-foot apartment building assessed at $928,000.
Jefferson has been held at Pamunkey Regional Jail since Feb. 14 and arrived at court Friday dressed in navy blue inmate’s garb. His defense did not oppose the revocation of his bond at Friday’s hearing but does have the right to plead for a change in bond conditions at any time.
Jefferson could spend up to 20 years in prison and owes $12.9 million in restitution after pleading guilty to a historic tax-credit scam involving at least 10 Richmond redevelopment projects and more than $7 million in fraudulent tax credits. Jefferson’s sentencing was originally set for April 8 but has been pushed to May 9. Prosecutors have recommended a 6.5-year prison sentence.
Jefferson is also being represented in the case by Hunton & Williams attorney John Martin.