ST. CROIX — Davidson Charlemagne and his wife, Sasha Charlemagne, both of St. Croix, pleaded not guilty during their arraignment hearing today in District Court to federal charges related to the theft of disaster relief program funds from the U.S. Department of Housing and Urban Development following Hurricanes Irma and Maria in September 2017.
Davidson Charlemagne, 50, Virgin Islands Department of Education director of Maintenance, was arrested after a grand jury returned an indictment charging him with three federal counts — fraud concerning programs receiving federal funds, wire fraud, and money laundering conspiracy. VIDE has placed him on leave without pay, according to an email the department sent WTJX.
Sasha Charlemagne, 44, was arrested and charged with money laundering conspiracy.
Attorney David Cattie entered a not guilty plea on behalf of his client, Davidson Charlemagne. He requested a speedy jury trial.
Attorney Renee Dowling stood in during the arraignment for attorney Pamela Colon, who represents Sasha Charlemagne. Dowling entered a not guilty plea on behalf of Sasha Charlemagne. She also requested a speedy jury trial.
U.S. Magistrate Judge Emile Henderson III noted the not guilty pleas on behalf of both defendants and granted the requests for speedy jury trials, setting the trial date for 9:30 a.m. August 5 before Judge Wilma Lewis. A calendar call is scheduled for 9 a.m. July 12. The attorneys have until July 24 to submit motions. Assistant U.S. Attorney Evan Rikhye is prosecuting the case.
Darin Richardson, 56, of St. Thomas, is a third defendant charged in the case. Richardson, former chief operating officer for the Virgin Islands Housing Finance Authority, faces a local charge of criminal conflict of interest and a federal charge of making materially false statements. Richardson is being represented by attorney Darren John-Baptiste, who said his client previously pleaded not guilty during his arraignment.
According to court documents, the charges against all three defendants stem from a two-year investigation involving a contract with the Virgin Islands Housing Finance Authority 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 hurricane, the U.S. Attorney’s Office announced on June 13. VIHFA received funding through the U.S. Department of Housing and Urban Development Community Development Block Grant – Disaster Recovery program to pay for the storage and management of the wood, which was initially placed at Sunshine Mall in Frederiksted. The mall’s owner, however, requested in 2020 that the VI government remove the wood.
VIHFA issued a public request for proposals on May 12, 2020 seeking qualified entities to submit bids for a contract to manage distribution of the wood for authorized purposes and to store it on St. Croix and St. Thomas, according to the indictment. Davidson Charlemagne allegedly contacted his longtime professional acquaintance, an unindicted co-conspirator identified in the indictment as “individual one,” who is the co-owner of a St. Croix company with experience submitting bids for RFPs issued by the VI government known as ISG. Davidson Charlemagne, who owns D&S Trucking, allegedly proposed for the ISG co-owner to submit a bid response to the woodpile storage and management RFP, with D&S Trucking serving as the subcontractor.
Over the life of the contract, Davidson Charlemagne, through his company D&S Trucking, was to receive about 87% of each payment received from VIHFA, while ISG would receive about 13% of the proceeds, according to the indictment. The ISG co-owner agreed to the arrangement and submitted ISG’s bid in response to the RFP, noting the role of D&S Trucking as the subcontractor. The ISG bid proposed to store and manage the wood on St. Croix and St. Thomas at a cost of $2.9 million over a three-year period. The ISG proposal included cost estimates for labor that were allegedly inflated and above the labor costs estimated by VIHFA.
ISG, or Island Services Group LLC, is co-owned by Morris Anselmi, of St. Croix, and Kimberly McCollum, of Florida. They were both indicted in February for allegedly stealing $500,000 in coronavirus relief funds. Anselmi and McCollum allegedly devised a scheme to defraud the U.S. government, through the U.S. Small Business Administration, and United Fidelity Bank, according to the indictment. They allegedly received Paycheck Protection Program loans from United Fidelity Bank, siphoned a portion of the loan proceeds into McCollum’s personal bank accounts, and submitted applications to the SBA for forgiveness of the PPP loans that falsely claimed the loan funds had been used for authorized purposes.
Davidson Charlemagne is accused of falsely certifying via electronic means as part of the bid-proposal requirement that his company had the required liability insurance, resulting in the charge of wire fraud. He allegedly failed to disclose he was employed by VIDE or that he would be obtaining rent-free warehouse space at Alexander Henderson Elementary School, the location of the stored wood on St. Croix. ISG’s bid, which Davidson Charlemagne allegedly prepared, essentially proposed that D&S Trucking would collect vastly inflated annual fees from one government agency, VIHFA, to store and manage the wood on St. Croix without rent on public property owned by another government agency, VIDE, which is where Davidson Charlemagne worked.
Richardson, while serving as VIHFA chief operating officer, led the authority’s Bid Evaluation Committee to review bids submitted by ISG and Infrastructure and Disaster Recovery Group, a Texas-based company whose bid proposal was altered by unknown co-conspirators after it was submitted to VIHFA, according to the indictment. Irrespective of its bid, IDRG did not meet federal eligibility requirements to bid for government contracts. Richardson formally awarded the wood storage and management contract in the amount of $2,993,500 to ISG and D&J Trucking on January 27, 2021 for a three-year period.
Anselmi signed a $2,993,500 contract between ISG and VIHFA on January 22, 2021 that stated it was for three years. The contract term dates listed in the document were only for two years, beginning February 1, 2021, and ending January 31, 2023. Daryl Griffith, who served as VIHFA executive director at the time, signed the contract on January 27, 2021.
Richardson allegedly violated federal regulations by formally awarding the contract while also serving on the Bid Evaluation Committee as both duties are required to be undertaken independently of each other. Richardson, while managing and supervising all procurement-related decisions at VIHFA in his capacity as COO, allegedly increased the value of ISG’s contract three times, totaling $4,423,644.50 by October 13, 2021. He allegedly received a payment of $107,000 from “individual one,” the ISG co-owner.
Davidson Charlemagne is charged with fraud concerning programs receiving federal funds for his alleged involvement in a fraudulent scheme from January 2021 to June 11. Despite receiving payments under the contract from February 2021, Davidson Charlemagne allegedly failed to remove the St. Croix woodpile from Sunshine Mall to Henderson school until August 2021, seven months after he began receiving payments under the contract. He allegedly collected over $582,000 in payments from VIHFA before beginning any work.
VIHFA continued to issue monthly payments to bank accounts owned and controlled by Davidson Charlemagne and his wife, Sasha Charlemagne. Both Charlemagnes are accused of utilizing federal CDBG – DR funds to pay for various personal and business expenditures, including over $365,000 in credit card bills, car loans, and bank lines of credit; about $100,000 in equipment purchases; over $120,000 in cash transfers to themselves; and over $35,000 on fireworks. They are both charged with money laundering conspiracy for allegedly utilizing criminally-derived proceeds to enrich themselves by transferring cash to themselves and paying their credit card bills.
