On Monday June 6, 2011 the U.S. Attorneys Office for the District of Columbia confirmed for the first time that Councilmember Thomas, of Ward 5, is the focus of an ongoing criminal investigation. The potential allegations from this criminal investigation will likely mimic the alleged conduct in the $1 million civil lawsuit recently filed against Thomas by the District Attorney General on behalf of the Council.

After conducting a five-month investigation the Attorney General stated that more than $300,000 intended for youth baseball programs and other charitable purposes as part of the 2008 budget went to Thomas for his personal use. In 2000 Thomas co-founded a nonprofit called Team Thomas which purportedly ran children’s sports programs until it was dissolved last December. DC funds granted to the Langston 21st Century Foundation were allegedly distributed to Thomas through his nonprofit and for-profit organizations. Further, Thomas is also accused of soliciting more than $80,000 from private donors on behalf of nonprofit Team Thomas even though the organization was not registered in the city to do so.

Thomas used Team Thomas’ debit card to spend more than $20,000 on personal travel and entertainment, including trips to Pebble Beach and Las Vegas. Thomas also wrote thousands of dollars worth of checks drawn from his nonprofit to himself, his for-profit company, HLT Development, or to “cash.” He also used $58,000 worth of funds to buy an Audi SUV which is registered in his own name.

So what potential crimes could Thomas be charged with by the US Attorneys Office? First, the USAO will likely have the discretion to charge Thomas under either the federal or District criminal code because under 5 U.S.C. 4101, District employees are classified as federal employees. And since Thomas’ conduct pertains to his position as a member of the DC council the USAO will probably charge him with federal offenses.

A variety of federal embezzlement charges may be utilized against Thomas. For example 18 U.S.C. 643 criminalizes instances in which officers or employees of the U.S. don’t account for any public funds they were not authorized to retain. Additionally, Section 641 subjects anyone who knowingly converts something of value of the United States. Since DC funds can be qualified as federal funds, Thomas can also potentially open himself up to liability under this embezzlement statute. Both embezzlement statutes carry 10 year maximum sentences.

A charge that commonly accompanies embezzlement is tax evasion, and if Thomas failed to report these embezzled funds in his annual tax returns he will likely face criminal tax evasion charges. Tax evasion carries maximum penalties of $100,000 and 5 years imprisonment. In addition to tax evasion, Thomas’ conduct could possibly have included false statements with regards to the tax-exempt status of his nonprofit organization. The false statements in this instance would be criminalized under either 18 U.S.C. 1001 or 26 U.S.C. 72061. False statements carry a maximum sentence of 5 years for each violation. Accordingly, Thomas could face a false statement charge for each document or tax return he filed related to this conduct.

Thomas can also be charged with wire or mail fraud if he utilized the mails or wires to carry out his scheme or artifice. It is already apparent that he used his nonprofit organization’s debit card to carry out some of this misappropriation of funds. Mail and wire fraud are codified under Sections 1341 and 1343, respectively. Fraud carries a maximum a sentence of 20 years imprisonment.

It is going to be interesting to see what, if any, charges the USAO will bring against Thomas. But what is readily apparent is that if he is charged, he will face significant charges and potential jail time. Another interesting note will be to see if the USAO will learn more about its own criminal investigation by observing the civil trial filed by the Attorney General.

The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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