More details surrounding local contractor Bobby Hicks’ indictment on felony charges have come to light, after a personal bankruptcy hearing Tuesday in which he refused to answer questions while disclosing that his namesake company’s accountant also was arrested and charged.
Hicks, the “Bobby” in Carytown-based real estate firm Bobby+April, appeared in federal court Tuesday for a creditors meeting related to his petition for personal bankruptcy protection – the day after he was arraigned in Richmond Circuit Court on five felony charges stemming from a legal dispute with a former client.
In light of those charges, Hicks refused to answer questions about his reported $853,000 in assets and $4.6 million in debts at Tuesday’s meeting, telling the bankruptcy trustee in his case, Kutak Rock attorney Peter Barrett, that he was invoking his Fifth Amendment right to not incriminate himself.
Hicks did volunteer during Barrett’s line of questioning that he was arrested Friday on the felony charges and released on a $5,500 bond that was paid through a bail bondsman by April Straus, his domestic partner and collaborator on Bobby+April.
Hicks also acknowledged the arrest of Ralph Ross, an accountant on Bobby+April’s staff who Hicks described as his office manager. Ross was arraigned Monday on a grand jury indictment of conspiracy to fraudulently obtain money.
The charge against Ross relates to Hicks’ indictments, which include two counts of obtaining money by false pretense, attempting to obtain money falsely, conspiracy to fraudulently obtain money, and larceny with intent to sell or distribute.
The charges, according to court records, are tied to money that belonged to TowneBank and/or Rhonda Lee, a former client of Hicks’ and former agent for Bobby+April who is suing Hicks and his contracting business, Renew Renovations. In her lawsuit, which seeks upwards of $75,000 in damages, Lee claims Hicks misrepresented work on her renovation project when pulling construction funds on her behalf from an account she had with the bank.
Attempts to reach Ross for comment for this story were unsuccessful. At Monday’s arraignment, Ross told Judge Tracy Thorne-Begland that he had yet to retain an attorney but would do so before May 22, when he and Hicks are required to report back to the circuit court with their attorney arrangements.
Hicks has retained Ed Riley of Henrico-based law firm Riley & Wells to represent him in the criminal case. At the creditors meeting Tuesday, Hicks’ bankruptcy attorney, Robert Canfield of Canfield, Wells & Kruck, said Riley had instructed Hicks to not answer questions under the Fifth Amendment privilege, though Canfield stressed that went against his own counsel to his client.
“That’s not my advice, but it’s what I understand,” Canfield told Barrett, who then proceeded to ask Hicks a series of questions about his assets and liabilities.
Hicks replied to each question with: “I’m going to invoke my Fifth Amendment right,” stating the phrase repeatedly over the course of a half hour with additional questioning from Frank Cragle with Richmond law firm Hirschler Fleischer, which is representing Barrett as the trustee in the case.
Reached before the meeting, Riley declined to comment on the felony charges against Hicks.
A grand jury brought the indictments May 7, authorizing Hicks’ and Ross’s arrest later that week. Assistant Commonwealth Attorney Sau Chan is prosecuting the case and declined to comment.
During their arraignment, Judge Thorne-Begland said the charges against Hicks carried maximum penalties ranging from three or four years up to 20 years in prison. The charge against Ross carries a penalty of up to 10 years.
Hicks has deferred comment to his attorneys since his arraignment but told BizSense after the creditors meeting that he expects to be cleared of the charges against him.
In addition to the criminal charges and the civil lawsuit from Lee, Hicks faces a separate civil suit from Beth and Richard Kelly, former clients who enlisted Bobby+April to renovate their Fan residence.
The Kellys’ suit, which was filed in late 2016, names Bobby+April and Straus as defendants along with Hicks and seeks upwards of $250,000 in damages, alleging multiple breaches of contract and violations of the Virginia Consumer Protection Act and Virginia Real Estate Board.
Representing Hicks in the Lee lawsuit is Mark Schmidt with Ayers & Stolte. Schmidt asked the court to dismiss the suit earlier this year, arguing that Lee’s allegations did not support a fraud claim and that work on her renovation of a rowhouse on Floyd Avenue was 80 percent complete when Lee filed the suit, indicating, he argued, Hicks’ intent to perform on the $375,000 contract.
Lee’s lawsuit claims Hicks did not complete her renovation on time, performed unsatisfactory work and misrepresented work performed or materials purchased when he requested construction draw payments on her behalf from TowneBank.
The suit argues that money Hicks received from TowneBank that was to be put toward her project instead was used on other Renew Renovations projects and for Hicks’ personal use.
Hicks filed for Chapter 11 bankruptcy protection in January. The petition was converted to a Chapter 7 liquidation last month at the request of creditors seeking payment from Hicks.
His petition listed debts owed to 20 creditors including $1.6 million to Michael Layman, a lender to Hicks’ Renew Properties; over $1 million to Stonebridge Investments, which lists the same address as the Ayers & Stolte law firm representing Hicks in the Lee suit; and $410,000 of income taxes owed to the IRS.
At a creditors meeting in February, Hicks said he filed for bankruptcy in part due to costs in defending himself against the lawsuits from Lee and the Kellys. About a week before he filed, Hicks said he entered into an agreement to sell his stake in Bobby+April to Straus, who is now the sole owner and serves as principal broker.
The petition lists the value of that transaction at $90,000, to be paid to Hicks in monthly installments over 45 months. At the creditors meeting this week, Hicks was asked if and with what funds those payments were made thus far, as well as questions about vehicles he has owned, the ownership of the Bobby+April storefront at 3311 W. Cary St., and a yacht and charter boat business Hicks and Straus own out of the area.
Hicks also was asked if he transferred money between Renew and Catalyst Construction RVA LLC, a contracting firm he previously said he works for and from which he anticipated drawing a salary starting March 1. The LLC was registered with the State Corporation Commission in November by Alexander Ayers with Ayers & Stolte and lists the same office address as Bobby+April.
Tuesday’s meeting was continued to June 12, by which time Hicks and his legal counsel are required to supplement his testimony – in light of pleading the Fifth – with evidence to show how answering such questions would incriminate him.
Court records show Hicks previously has petitioned for bankruptcy twice: in a Chapter 13 filing in 1996 and a Chapter 7 petition in 2010.
Hicks and Straus started Bobby+April eight years ago as a service to buy, sell and renovate homes. They have previously told BizSense that Bobby+April operated separately from Renew Renovations and that the contracting firm was recommended to clients only if its services matched up with a particular project.
Straus said Wednesday she could not comment for this story. She later sent an email obtained by BizSense to Bobby+April clients and other followers responding to the recent events surrounding the company:
“I am sure the news reports yesterday came as a surprise to you as it did to us here at Bobby+April,” the email read. “I wanted to personally reach out to each of you to assure you that the brokerage continues to operate under my ownership with the highest possible standards of honesty and integrity. We are proud of our representation of our clients and the work that we do in our market.
“While Bobby, as the head of Renew Renovations, has experienced some financial setbacks, the brokerage was not involved in any way and none of this impacts the brokerage or our brokerage clients. Each of our (Realtors) is committed to remaining at Bobby+April and our business will (continue) to serve you, our clients and friends, without changes of any kind.
“I cannot tell you how difficult the past week has been and how much everyone here appreciates all the notes, email, calls and texts of support and caring. We hope that in the very near future all the issues referenced in the article will be cleared (and are confident that it will be!) and we will be reading a new splashy, but complimentary, article!”
Correction: Michael Layman was a lender to Hicks’ Renew Renovations. An earlier version of this story incorrectly described him as an investor.