An arrest and indictment tanked his businesses. Now he’s been exonerated.

Eugene Thomas and Chuck James Cropped

Eugene Thomas (left) and his attorney Chuck James. (BizSense photo)

There were two phone calls over the last six months that changed the course of Eugene Thomas’s life.

The first came last October.

“I remember it like it was yesterday,” Thomas said earlier this month. “I had my morning coffee, I was checking my emails and I received a phone call from an FBI agent who stated there was a warrant for my arrest and I needed to come outside.”

“When I came to my front door there were probably 25 cars in front of my home. My children were there, my wife was there. It was just really bizarre,” he recalled.

Thomas, 43, was arrested on the spot and charged in a 28-count criminal indictment accusing him of healthcare fraud, wire fraud, theft of Social Security funds, attempting to bribe a witness and other claims. It all stemmed from the operations of his Richmond-based businesses, Greater Unity Adult Services and Greater Unity Adult Employment Services.

The charges carried a maximum punishment of up to 20 years in prison.

Adding to his worries, Thomas learned that the government was also charging Brady Buffington, who served as Thomas’s top lieutenant at the companies, and Thomas’s 77-year-old mother, Shelia Simms Thomas, who helped out at the business.

The second fateful phone call came about six months later in the first week of March. It was to Chuck James, a local Williams Mullen attorney who has been representing Thomas in his criminal case. On the other line was the U.S. Attorney’s Office of the Eastern District of Virginia.

“My phone rang (on March 5) at 9:38 a.m. and I got the call that the government was going to be dismissing all of the charges later that day,” James recalled. “We drove to Eugene’s house, knocked on the door and told him the good news. It was one of the best days of my professional life.”

Those two calls capped a three-year legal struggle that forced Thomas to effectively shutter his once-thriving businesses and fight for his freedom with the help of his attorney by trying to convince prosecutors they had it all wrong.

A Richmond native, Thomas started Greater Unity Adult Services in 2006, several years after graduating from Hampton University and receiving an MBA from George Washington University. GUAS provided support services and group homes for adults with intellectual disabilities. It grew to seven locations, including five group homes and two support centers.

Later Thomas launched Greater Unity Employment Services, offering job training, placement and coaching for the same clientele.

“We were pretty much the only family a lot of these individuals had at the time,” Thomas said of the folks in his programs. “We had an outstanding reputation in the community with family members and community service boards.”

Both companies derived their revenue by billing Virginia Medical Assistance Program, which administers the federal Medicaid program in Virginia. For some of the services the company also became custodian of its clients’ Social Security stipends.

The company had 42 employees, annual revenues ranging from $4 million to $7 million, and Thomas said the business was at its height in 2020. While the pandemic complicated his operations that year, he also learned that August that he was under federal investigation.

“I received a phone call from a family member of someone in one of our programs who said they had received a visit from the FBI,” Thomas said. “They had no idea what it was about and it was pretty shocking at the time when we got the call. It was, ‘Why is the FBI coming to visit you?’”

Then another, similar call from another client’s family member came in. Thomas soon learned that some of his former employees also had been contacted by FBI investigators.

Thomas said he was scared and still wasn’t clear on exactly what the investigation was about.

“I had never had any sort of legal situation in my life, let alone the FBI,” he said.

Though he had yet to be charged with any crime, Thomas eventually hired James, a white-collar criminal attorney at Williams Mullen’s downtown office. One of the selling points for hiring James: he previously worked as a federal prosecutor, including a stint in the same U.S. Attorney’s Office that was running the investigation.

While James got to work on figuring out why the government had zeroed in on Greater Unity, Thomas said he did his best to keep his businesses running.

“To be honest it was business as usual because I knew the entire time we were innocent,” Thomas said. “During the investigation our business started to grow and we were actually thriving and reaching our peak recovering from Covid. It was more of a mental distraction because it was something I couldn’t talk about. It was this cloud over us.”

That cloud stuck around for more than two years, as James said there was sporadic communication with the USAO and still no charges filed.

Then came October 2023 and the first aforementioned phone call.

richmond federal courthouse

The federal courthouse in Richmond where Thomas’s case played out. (BizSense file)

According to the government’s initial indictment document, Thomas was the subject of federal grand jury investigations from March 2020 to May 2023 for alleged federal crimes.

Prosecutors claimed that from 2016 through 2022, Thomas carried out a scheme to defraud the Medicaid system by submitting faulty claims for payments totaling at least $1.51 million.

The indictment also alleged that Thomas and his companies abused Social Security payments and pandemic-era Paycheck Protection Program payments. He was also accused of inducing an accountant to make false statements related to his company’s financial practices and accused of tampering with a witness during the grand jury investigation. The government’s investigation relied on at least one unnamed employee from Greater Unity, according to court records.

Thomas, as the lead defendant in the case, was taken into custody from his home and released on personal recognizance after about six hours. Buffington and Thomas’s mother were not arrested and were charged with fewer counts than Thomas.

The government wanted the defendants to forfeit at least $1.8 million and set a trial date for April 29.

Thomas and his co-defendants pleaded not guilty. And while the indictment didn’t get picked up by the local press at the time, word of the allegations nonetheless spread through Thomas’s business and personal life.

He was forbidden from discussing the case with anyone, including his employees and even his co-defendant mother. About a month later his companies were administratively terminated from the federal programs they had billed for revenue for their services.

Thomas said he had to lay off employees and tell the guardians of his clients that they had to relocate from his group homes and find new day support services.

“Word got out pretty quickly,” Thomas said. “It was just a tsunami of calls from families or case managers. It was very difficult to explain something that you can’t legally talk about.”

James said they spent those ensuing months simultaneously preparing for trial while also trying to show the government that its case didn’t hold water. He was helped in the case by private investigator Harry Lidsky and attorney Megan Rahman of Troutman Pepper.

“We spent pretty much all day every day from the time of the arraignment through the dismissal preparing for the case and picking it apart,” James said.

As the case wore on, James also got dragged into the fray. In an unusual episode, the government accused James of helping Thomas and the unnamed accountant craft a letter that they submitted to the DOJ that was meant to help Thomas’s case. Prosecutors claimed that James could be potentially accused of obstruction, which could put him in conflict with his client’s case.

But those claims were proven to be false earlier this year when it was determined that the accountant was an unreliable witness. After having to defend his own credibility, James was left that much more motivated to prove what else he knew to be true: that the rest of the government’s case was legally and factually wrong.

With the trial looming, James said he requested and was granted a meeting with the bosses at the USAO.

“Ultimately a couple weeks ago I made a presentation to the U.S. Attorney’s Office management and said, ‘You got it wrong and you got it wrong badly but there’s time to fix it before we get to trial,’” James said.

Without going into detail about what the government got wrong, James said, “We were able to show that some of the allegations made against Eugene and his mother were not and could not have been perpetrated by them and there was forensic evidence to support that.”

Explaining it further, James said, “We identified a number of investigative shortcomings but really focused on one legal theory where forensic data made it clear to us and ultimately to the government that the indictment was fatally flawed.”

The USAO ultimately relented and asked the court on March 5 to dismiss all charges against all three defendants.

“The government has concluded that given the current state of the evidence, it no longer believes that it would be able to prove the defendants’ guilt as to some counts of the indictment beyond a reasonable doubt. As to the other counts, a prosecution would not serve the interests of justice,” the USAO’s dismissal stated.

James got word that same morning, and he and Lidsky, the private investigator, thought of a way to surprise Thomas with the news.

“We came up with a scheme to tell Eugene that we wanted him to meet us for lunch. Then we hot-footed to his house,” James said.

They knocked on Thomas’ door and explained what had happened that morning – that the cloud he’d been living under was lifted.

“I just fell to the ground,” Thomas said. “I couldn’t believe it and I still can’t believe it now. I had a feeling we were going to get a positive result but not in this way. I was preparing myself for a trial.”

Then they had to break the news to Thomas’s mother. Thomas called her, but he said she didn’t believe it and wanted to hear it from James.

“She came to the house and we cried and hugged,” Thomas said.

James shed some tears that day as well.

“It’s been a long time since I cried but there were a lot of tears and a lot of hugs,” James said. “You don’t get that a lot of times as an attorney, much less a white-collar criminal attorney, getting all charges dismissed. It’s a pretty singular event.”

A few weeks later, Thomas said he’s still processing the emotions of it all.

“I went from everyone in the business world disowning me and not talking me. (Prior to the dismissal) my mental state was not great and now I’m at an all-time high and I don’t know how to deal with it,” he said.

He said the process created a bond between him and James that goes beyond attorney and client.

“There’s a human element of this situation that I want people to understand. I probably wouldn’t be here right now if it wasn’t for him…the fact that he cares and he believed in this case so much and he had me believe in myself in ways I didn’t believe.”

James said he credits the management of the USAO for ultimately realizing the errors in the case against Thomas.

“Even the Department of Justice and the government gets it wrong and to their credit, if you can get to the right person, they can still do the right thing,” James said. “The management team that looked at this matter, I think they recognized a mistake in the investigation and they fixed it.”

The USAO declined to comment when contacted by BizSense last week.

With the case behind him, Thomas is now left to decide what to do about his businesses, which he had mothballed during the legal process.

He wouldn’t say much about which direction that might go, but James also has his back on those next steps.

“Stay tuned. We’re still working through that,” James said. “I’m urging him not to make any decisions in a rash way but to sit back and enjoy his new freedom.”

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Tom Hudson
Tom Hudson
24 days ago

I wish more people understood how frequently prosecutors and law enforcement get these sorts of prosecutions incredibly wrong… And even in the face of dismissal or acquittal, the far-reaching consequences just the accusation and arrest can have. There should absolutely be civil remedies for defendants to recover from the government in these cases.

Dr. Abe Gomez
Dr. Abe Gomez
24 days ago
Reply to  Tom Hudson

I completely agree with the sentiment expressed in your comment; however, it’s a complex issue. There must be consequences for causing harm to someone’s business based on flawed allegations. It creates a situation where everyone loses. If the government were to compensate the falsely accused party for their losses, including lost business, legal expenses, and missed opportunities, the question arises: where does that compensation come from? Taxpayers would inevitably shoulder the burden. The taxpayers have already suffered enough from the investigation being a bust, how much was this time worth?

Bryan Wynne
Bryan Wynne
24 days ago
Reply to  Dr. Abe Gomez

Dr. Gomez, I concur with your aforementioned comment. Taxpayers may shoulder the burden of compensating an alleged suspect, and I understand your issue with that. Unfortunately, the government makes mistakes as well, and there are times when an individual is wrongfully convicted/incarcerated. Those times, although they aren’t a large-scale occurrence, do still transpire, and when they do the government compensates said individual for the time that they unjustly served.

Craig Davis
Craig Davis
23 days ago
Reply to  Dr. Abe Gomez

all that is correct. The problem remains, however, is that there is no (or precious little) disincentive not to overcharge, over-prosecute, and cause these harms. I’m not sure punishing the taxpayers by making gov’t funded payouts is the narrowest solution yet a solution is necessary just the same. It seems unlikely but taxing the funds from the prosecutor or investigating agency’s budget could provide some cudgel to force them to paint within the lines – ie not bring cases that aren’t vetted and re-vetted.

Shawn Harper
Shawn Harper
6 days ago
Reply to  Craig Davis

Yeah, I agree with all of you. DAs, prosecutors, etc, are frequently motivated by things not having to do with justice according to the law, and it can be quite maddening that falsely accused people, esp when there is evidence that law enforcement were being, at the very least, too aggressive often have no easy course to make themselves whole afterward. But right now, the trend seems to be lurched toward the other direction, as if everyone is innocent, and there is a huge problem when law enforcement is too timid to enforce the laws — after all, there can… Read more »

Esther Pino
Esther Pino
23 days ago
Reply to  Tom Hudson

My name is Esther Pino I am reaching out to you with a heavy heart, as our family faces an uphill battle in seeking justice for my daughter, Elizabeth.  You see my daughter has been sentenced to 20 years for conspiracy to commit healthcare fraud and she did not do this.  The prosecutor twisted the truth, incentivized and coerced witnesses even offered immunity for their testimonies. Despite the fabricated evidence against my daughter we stay firm in our unwavering belief in her innocence, the truth seems to be drowned out by the overwhelming power of the government. It feels like… Read more »

Last edited 23 days ago by Esther Pino
Kelly Lawson
Kelly Lawson
21 days ago
Reply to  Tom Hudson

I have known the accused for a while. I was shocked when I read this article. Something still does not sit right with me on both sides.

Nadir Derian
Nadir Derian
24 days ago

I’m incredibly grateful for this article – I know this family has been through so much. I can only say I’m grateful for them and thankful we can see in print that all this is going to be like a bad dream one day. Nadir Derain

Elaine Blackmon
Elaine Blackmon
23 days ago

who pays his legal defense bill?

C Jay Robbins
C Jay Robbins
23 days ago

If I were King, I would absolutely prohibit dissemination of reports of arrests or pictures of arrested suspects. After conviction, fine. The humiliation is part of the punishment and rehabilitation. Before conviction, every defendant is as innocent as a newborn babe.

Shawn Harper
Shawn Harper
6 days ago
Reply to  C Jay Robbins

I agree with this.

Shawn Harper
Shawn Harper
6 days ago

I will say this first: I think there should be legal redress when the government does damage to a business wrongfully, and wrongfully includes being too aggressive. I also am not really on anyone’s side here. I tend to be on Law Enforcement’s side, and worked in the health care industry and the amount of grey-area fraud is huge, and often seen by many as Normal Business Practice — Personal Injury lawyers are notorious for encouraging practicioners to drive up the costs or they won’t send their clients there, and I followed the cases of many people were convicted of… Read more »

Mili Rai
Mili Rai
6 days ago

Does anyone here realize the enormity of healthcare expenses? This man had five group homes, two support centers, and 40+ employees, and the US Attorney General’s office is investigating him for Medicaid fraud worth a mere $1.5 Million Dollars? Medical billing is a tough field. Mistakes are often made. There are huge red sirens running off in my mind about why they even tried to persecute/prosecute this person in the first place! I mean, sure, if it was $15 Million, then that definitely indicates a problem! But, a small business owner running a healthcare service for the community with a… Read more »