ST. CROIX — The prosecution began calling witnesses today in District Court on St. Croix as the fraud trial of a former Virgin Islands Housing Finance Authority executive continued before Judge Wilma Lewis after two days of jury selection.
Darin Richardson, who served as VIHFA chief operating officer from 2020 to 2022, is accused of awarding a contract for the management of lumber needed in the disaster recovery process to Island Services Group LLC, whose co-owner Morris Anselmi allegedly paid him $107,000.
Richardson is also accused of fraudulently obtaining a construction loan from Banco Popular and using a portion of the proceeds to purchase property on St. Thomas, as well as lying to a special agent of the U.S. Department of Housing and Urban Development’s Office of Inspector General by stating he had recused himself from any business dealings between VIHFA and ISG.
Richardson is federally charged with money laundering, bank fraud, making a materially false statement, and making a false statement on loan and credit applications. He is locally charged with criminal conflict of interest.
The charges stem from a two-year investigation involving a three-year, $4.4 million contract with VIHFA for storage and management of wood that the Federal Emergency Management Agency shipped to the territory to be used for the reconstruction of commercial and residential buildings following the 2017 hurricanes.
After a two-day jury selection process that began Tuesday, the trial, which is estimated to last nine to 10 days, continued today with opening statements from attorneys.
Assistant U.S. Attorney Cherrisse Woods said the case was about “greed and misconduct,” suggesting Richardson used his position as VIHFA chief operating officer to enrich himself. She said Richardson formally awarded a $2.9 million contract to ISG on January 27, 2021. She said Richardson then approached Anselmi about going into business together, adding that the two did just that. She said Richardson subsequently accepted a payment of $107,000 from Anselmi.
Richardson allegedly increased the value of ISG’s contract three times, totaling about $4.4 million by October 13, 2021. From September 11, 2020 to December 18, 2020, Richardson allegedly submitted documents to Banco Popular containing false estimates of construction costs for repairs to his home in Estate Bordeaux on St. Thomas while applying for a $200,000 construction loan.
Woods, who is prosecuting the case along with Assistant U.S. Attorney Daniel Huston, said Richardson spent $98,000 of the construction loan on home repairs and used the remainder to purchase a vehicle. She said he also combined $50,500 of the loan funds with the $107,000 he allegedly received from Anselmi to purchase property in Estate Fortuna on St. Thomas.
Richardson is charged with money laundering for allegedly transferring funds derived from unlawful activity relating to the BPPR construction loan to the U.S. Marshals Service for the attempted purchase of the real property on St. Thomas.
Richardson’s attorney, Darren John-Baptiste, during his opening statement, said the evidence will show the bank never took any action against his client because it did not find anything wrong, and the construction work on his house was completed. If there was money left over at the end of construction, John-Baptiste said it was Richardson’s money since he had to ultimately repay the construction loan.
Richardson allegedly violated federal regulations by formally awarding the woodpile contract while also serving on VIHFA’s Bid Evaluation Committee, as both duties are required to be undertaken independently of each other.
Although the government maintains that Richardson awarded the contract to ISG, John-Baptiste pointed out that all five members of the Bid Evaluation Committee signed off to award the contract. He said his client had no more authority on the Bid Evaluation Committee than the other four members.
The prosecution started calling witnesses to testify after the attorneys made their opening statements, beginning with VIHFA officials. The prosecution is expected to call more than 20 witnesses during the trial.
The prosecution questioned Jacquiel Fredericks, VIHFA chief human resources officer, about the documents included in Richardson’s HR file. John-Baptiste, during cross examination, learned from Fredericks that she had not seen any executed conflict of interest policy in Richardson’s file.
Jeanine Blyden, VIHFA director of procurement, testified that Richardson was among the members of the Bid Evaluation Committee who submitted a document detailing how they scored the submitted bids. Blyden then identified Richardson in court.
The government also charged two others in connection to Richardson’s case, Davidson Charlemagne and his wife, Sasha Charlemagne. Richardson’s case, however, was severed so he is standing trial alone.
The Charlemagnes pleaded not guilty to charges related to the theft of disaster relief program funds during their initial arraignment on June 20, 2024.
READ MORE: “Charlemagnes plead not guilty to federal charges related to theft of disaster relief program funds”
Davidson Charlemagne’s company, D&S Trucking, allegedly stood to gain vastly inflated annual fees from VIHFA to store and manage the wood on St. Croix. He allegedly proposed for ISG co-owner Anselmi to submit a bid response to the woodpile storage and management request for proposals, with D&S Trucking serving as the subcontractor. Kimberly McCollum, who is expected to testify as a government witness in Richardson’s trial, is also co-owner of ISG.
The Charlemagnes were subsequently arraigned on new charges of false claims last October.
The Charlemagne’s are both charged in a second superseding indictment with money laundering conspiracy, wire fraud, and nine counts of making false claims upon the United States by allegedly submitting fraudulent timesheets indicating that Sasha Charlemagne had worked multiple eight-hour days at the woodpile site despite not being physically present in the territory. Davidson Charlemagne is also charged with fraud concerning programs receiving federal funds.
The Charlemagnes are scheduled to appear in District Court for a calendar call on April 10. Richardson’s trial will resume at 9 a.m. Friday in District Court.
