Three people arrested in June in connection with an alleged multimillion-dollar disaster recovery fraud pleaded not guilty to new charges brought by federal prosecutors during arraignments Thursday morning on St. Croix.
The charges followed a two-year federal investigation into a contract to manage and store lumber earmarked for disaster recovery projects, which prosecutors say was improperly awarded and executed.
The original indictment that a federal grand jury returned against the trio charged former V.I. Education Department Maintenance Director Davidson Charlemagne with government program fraud and wire fraud. Both he and his wife, Sasha, were charged with money laundering conspiracy, and Darin Richardson — former chief operating officer at the V.I. Housing Finance Authority — was charged with criminal conflict of interest and making material false statements to a federal agent. Prosecutors in October charged the Charlemagnes with eight counts of making false claims against the United States in a superseding indictment.
A second superseding indictment, filed in U.S. District Court on Wednesday, added a charge of wire fraud against Sasha Charlemagne and charges of bank fraud, making a false statement on a loan or credit application, and money laundering against Richardson. No additional charges were filed against Davidson Charlemagne.
The latest charges raised questions about whether a federal judge’s previous order to sever Richardson’s case from that of the other defendants was still in effect. Attorneys for the defendants argued last summer that the government lacked evidence to charge the trio with conspiracy because Richardson and the Charlemagnes were charged with different crimes. The Justice Department opposed the motion to sever, but a judge sided with the defendants in September.
On Thursday, Magistrate Judge Emile Henderson III said the latest superseding indictment — which laid out charges against Richardson and both Charlemagnes in a single document — gave the impression of a joinder. Assistant U.S. Attorney Daniel Huston told the court that the government still intends to prosecute the cases separately.
