RICHMOND, Virginia — A former Richmond developer who fraudulently obtained historic tax credits faces a longer prison term than originally expected after prosecutors presented evidence Tuesday that he may have hidden about $2.5 million, perhaps by burying it in a homemade safe constructed of pipe.
After an all-day hearing, U.S. District Judge John A. Gibney denied Billy Gene Jefferson credit for acceptance of responsibility and imposed a two-level sentencing enhancement for obstruction of justice. His ruling on those two factors increase Jefferson's sentencing range under federal guidelines by as much as six years, to 11 years and three months. Sentencing is set for Sept. 23.
Jefferson pleaded guilty in December 2013 to fraudulently obtaining more than $12 million in state and federal tax credits. He was allowed to remain free while awaiting sentencing so he could liquidate his assets to raise money to make restitution and pay any fine imposed by the court. As part of the agreement, he was required to report to authorities any real estate or monetary transfer of more than $25,000.
But prosecutors said in court papers that Jefferson "took his criminal conduct to an Olympic level that is rarely, if ever, encountered in federal court."
For starters, they claim Jefferson structured at least 30 transactions at or just below the $25,000 reporting threshold. He also made 19 withdrawals of $100,000, prosecutors say, and opened a new bank account funded with unreported transfers from foreign accounts and made repeated ATM and counter withdrawals totaling $153,620. Jefferson also spent more than $37,000 on American Express and Visa gift cards.
The government claims that just days after the guilty plea, Jefferson transferred $2.1 million to a "cage account" at a Las Vegas casino and drew on that account on three visits. Jefferson claims he spent all the money or lost it gambling. But Internal Revenue Service Special Agent David Ulmet testified that casino records suggest that Jefferson walked away from Las Vegas the last time with about $1.8 million in cash and chips — all of which has not been found.
"Let me be very clear — there is no cash hoard," defense attorney Charles James said, adding that the government cannot prove otherwise.
Gibney agreed that nobody knows what happened to Jefferson's casino loot "but it's his money and he's responsible for it."
The suspicion that Jefferson could have buried the money in a homemade vault arose after investigators found an approximately four-foot length of eight-inch PVC pipe painted in camouflage colors behind Jefferson's home. Jefferson had called an employee and told him to retrieve the pipe from his garage and dispose of it. Investigators also found a receipt showing he had purchased four 8-inch end caps along with cement for affixing them to the pipe, but they found only two end caps of that size.
Investigators also found evidence on Jefferson's laptop computer that someone had watched a marketing video and an instructional video about undergrounds safes.
While awaiting his first sentencing date, authorities said, Jefferson also allegedly created a fake Arkansas driver's license using his photo and his brother's personal information and used it to charter a one-way flight to England. He dropped his plan to flee only after learning that authorities in England would likely board the aircraft to inspect his passport upon his arrival. That led to his re-arrest and his guilty plea in June to unlawful transfer of a fake ID and aggravated identity theft.
Gibney said that probably every white-collar criminal thinks about escaping to somewhere he won't be found, so he doesn't hold that against Jefferson — especially since he didn't go through with the plan. The way Jefferson handled money in the wake of his first arrest was far more troubling, Gibney said.
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