Cephas stimulus case set for trial

The new Cephas facility was meant to be built on 5 acres at 3413 Formex Road. The property had been owned by the company, but was sold in foreclosure in February.

The new Cephas facility was meant to be built on 5 acres at 3413 Formex Road. The property had been owned by the company, but was sold in foreclosure in February.

A jury will decide the fate of a pair of local entrepreneurs accused of abusing a recession-era stimulus program.

A trial date is set for March 1 at the Richmond federal courthouse for Morris Cephas Sr. and Chiroya Cephas. The couple, through their defunct Southside recycling company Cephas Industries, is facing criminal charges for an alleged 4-year scheme to milk the state and federal government out of more than $300,000 in American Recovery and Reinvestment Act funds.

The intention of the grants was to stimulate the economy by providing incentives to diversify the state’s energy supply and the Cephases at the time agreed to build a new recycling facility on the city’s Southside. The charges claimed the Cephases instead used much of the money for their own personal means, including paying their taxes.

Cephas Industries previously worked out of 2320 Deepwater Terminal Drive. Photo by Michael Schwartz.

Cephas Industries previously worked out of 2320 Deepwater Terminal Drive. Photo by Michael Schwartz.

The trial date was formally confirmed Wednesday at an arraignment at the U.S. District Courthouse on East Broad Street. The hearing was a re-arraignment of sorts, after federal prosecutors filed a modified indictment that dropped many of the counts the Cephases were initially charged with in an original grand jury indictment in October.

The couple has pleaded not guilty throughout the process.

The changes to the indictment were a minor victory won by the Cephases and their attorneys, who argued that many of the initial 28 counts were duplicative. The charges they face are now down to eight counts, including conspiracy, false statements and theft of government property.

That reduction in charges also likely reduces the potential overall sentence they face, according to federal guidelines. The initial 28 counts carried a combined potential maximum penalty of decades in prison, according to federal guidelines.

Also dropped this week from the initial charges was Cephas Industries. The company went out of business in 2013, according to the government, after not delivering on its end of a deal to build a $3.5 million biomass recycling complex to be built in a 33,000-square-foot space on Formex Road. It was hailed at the time for the expected creation of 50-75 jobs and to be operational by spring 2011.

Ultimately, the company was removed as a defendant, leaving the Cephases personally on the line.

The trial is set for 10 a.m. on March 1 and will run at least two days.

Prosecuting the case for the feds are Assistant U.S. Attorneys David Harbach and David Schiller.

Chiroya Cephas and Cephas Industries are represented by Williams Mullen attorney John Davis.

Morris Cephas is represented by attorney Braxton Hill from Christian & Barton.

The couple was not arrested as a result of the charges and have remained free throughout the process.

The new Cephas facility was meant to be built on 5 acres at 3413 Formex Road. The property had been owned by the company, but was sold in foreclosure in February.

The new Cephas facility was meant to be built on 5 acres at 3413 Formex Road. The property had been owned by the company, but was sold in foreclosure in February.

A jury will decide the fate of a pair of local entrepreneurs accused of abusing a recession-era stimulus program.

A trial date is set for March 1 at the Richmond federal courthouse for Morris Cephas Sr. and Chiroya Cephas. The couple, through their defunct Southside recycling company Cephas Industries, is facing criminal charges for an alleged 4-year scheme to milk the state and federal government out of more than $300,000 in American Recovery and Reinvestment Act funds.

The intention of the grants was to stimulate the economy by providing incentives to diversify the state’s energy supply and the Cephases at the time agreed to build a new recycling facility on the city’s Southside. The charges claimed the Cephases instead used much of the money for their own personal means, including paying their taxes.

Cephas Industries previously worked out of 2320 Deepwater Terminal Drive. Photo by Michael Schwartz.

Cephas Industries previously worked out of 2320 Deepwater Terminal Drive. Photo by Michael Schwartz.

The trial date was formally confirmed Wednesday at an arraignment at the U.S. District Courthouse on East Broad Street. The hearing was a re-arraignment of sorts, after federal prosecutors filed a modified indictment that dropped many of the counts the Cephases were initially charged with in an original grand jury indictment in October.

The couple has pleaded not guilty throughout the process.

The changes to the indictment were a minor victory won by the Cephases and their attorneys, who argued that many of the initial 28 counts were duplicative. The charges they face are now down to eight counts, including conspiracy, false statements and theft of government property.

That reduction in charges also likely reduces the potential overall sentence they face, according to federal guidelines. The initial 28 counts carried a combined potential maximum penalty of decades in prison, according to federal guidelines.

Also dropped this week from the initial charges was Cephas Industries. The company went out of business in 2013, according to the government, after not delivering on its end of a deal to build a $3.5 million biomass recycling complex to be built in a 33,000-square-foot space on Formex Road. It was hailed at the time for the expected creation of 50-75 jobs and to be operational by spring 2011.

Ultimately, the company was removed as a defendant, leaving the Cephases personally on the line.

The trial is set for 10 a.m. on March 1 and will run at least two days.

Prosecuting the case for the feds are Assistant U.S. Attorneys David Harbach and David Schiller.

Chiroya Cephas and Cephas Industries are represented by Williams Mullen attorney John Davis.

Morris Cephas is represented by attorney Braxton Hill from Christian & Barton.

The couple was not arrested as a result of the charges and have remained free throughout the process.

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