A federal judge will hear opening arguments Thursday in the trial of a former V.I. Housing Finance Authority executive who was charged last summer in connection with an alleged multimillion-dollar disaster recovery fraud.
Jury selection began Tuesday morning and concluded Wednesday afternoon with the empaneling of 12 jurors and three alternates. U.S. District Judge Wilma Lewis told the jurors that the trial is estimated to take 9-10 days. She directed them to refrain from discussing the case with anyone during recesses and avoid news coverage of the case and trial.
Darin Richardson, former chief operating officer at VIHFA, was originally indicted alongside former V.I. Education Department Maintenance Director Davidson Charlemagne and his wife, Sasha Charlemagne, on charges of making a material false statement to a federal investigator and criminal conflict of interest. In September, Lewis agreed to sever Richardson’s case from that of the Charlemagnes, who are charged with different crimes.
Prosecutors further charged Richardson with bank fraud, making false statements on a loan application and money laundering in a superseding indictment filed in December. He has pleaded not guilty to all charges.
According to the original indictment, Richardson led the evaluation committee that awarded a nearly $3 million, three-year contract to Island Services Group — or ISG — in January 2021 to manage and store disaster recovery lumber. ISG subcontracted the work to the Charlemagnes’ company, D&S Trucking.
Richardson increased the value of that contract to more than $4.3 million over the next year — even though, prosecutors alleged, no actual work was being done. Instead, the lumber was stored outside and rent-free at the shuttered Alexander Henderson Elementary School on St. Croix.
The original charges against Richardson stem from a $107,000 payment he received from ISG principal Morris Anselmi in February 2022. Richardson later participated in a voluntary interview with a special agent from the U.S. Housing and Urban Development Department’s Inspector General’s Office, during which he claimed he had recused himself from all matters related to ISG.
After the jurors were dismissed for the day Wednesday, prosecutors called that special agent Jamila Davis — now assistant special agent in charge of Florida and the Caribbean in the U.S. Small Business Administration’s Inspector General’s Office — to testify Wednesday evening amid efforts by Richardson’s attorney, Darren John-Baptiste, to exclude a memorandum of that interview from being shown during the trial.
Davis said Wednesday that Richardson was not the target of any investigation at the time of the interview. Rather, she’d sought a meeting with him after hearing that he had left VIHFA “abruptly” because she thought he might be able to shed light on suspected wrongdoing at the agency.
“In this situation, Mr. Richardson really just talked, and I took notes while he was talking,” she said.
Davis said the interview was not recorded but that she took abbreviated notes and typed those up in a memo, which prosecutors entered as evidence in the upcoming trial. Davis indicated that standard procedure is to scan and upload copies of the notes into a shared folder and shred the originals at the conclusion of an investigation.
The government has been unable to produce the original notes, and John-Baptiste argued in a motion filed last week that their failure to produce them constituted a violation of the so-called “Brady rule,” which requires prosecutors to disclose any material that could be exculpatory. On Wednesday evening, John-Baptiste argued that the notes could contain more detailed information about Richardson’s recusal timeline — and that they could have been destroyed for that reason.
According to exhibits attached to the government’s opposition to John-Baptiste’s motion, Richardson emailed VIHFA’s then-Executive Director, Daryl Griffith, on Feb. 14, 2022, notifying Griffith of the conflict of interest and recusal from all matters related to ISG. The message was sent on the same day Anselmi sent Richardson $107,000 and exactly one year before Richardson’s sit-down with Davis.
Lewis did not rule on the matter Wednesday, and the court recessed until Thursday morning.
A heavily redacted copy of the memorandum of interview was filed in U.S. District Court in August. Prosecutors filed an unredacted version alongside their opposition to Richardson’s attorney last week. According to Davis’s account, Richardson “acknowledges that the employees of ISG have never had any regular work to do because the VIHFA construction projects have not been initiated as originally intended.” Further, he “stated he feels partially responsible for not taking the necessary steps to limit payments to ISG for work not actually being performed.”
“No one thought to do that,” he said, according to Davis, who added that Richardson characterized it not as fraud but as a wasteful oversight.
According to the memo, Richardson went on to excoriate emergency management consultants Witt O’Brien’s. At one point, Richardson said he didn’t think it was a violation of ISG’s contract to bill VIHFA for an hourly wage higher than what was being paid to employees or contractors and stated, “It’s the same thing that Witt O’Brien [sic] does.”
“The only time RICHARDSON has felt pressured to do something that he was not comfortable with,” Davis wrote, “was when he was asked to sign a Witt O’Brien (WOB) Work Plan. This request was made by Adrienne WILLIAMS-OCTALIEN, VIHFA Office of Disaster Recovery. RICHARDSON was asked to sign the WOB Work Plan while Daryl GRIFFITH was on vacation or otherwise unavailable. RICHARDSON refused to sign the document. If he would have approved the work plan, it would have made it appear that WOB performed work for the VIHFA that could be billed under the WOB Contract with the VI Public Finance Authority (PFA). WILLIAMS-OCTALIEN told RICHARDSON that Governor BRYAN will be upset by RICHARDSON’s refusal to sign.”
Richardson described Witt O’Brien’s as “controlling” everything in the U.S. Virgin Islands, according to the memo, and said they were benefiting from all of the federal funding awarded to the territory in the wake of hurricanes Irma and Maria.
“WOB is being overpaid for its services or work that could easily be done by USVI departmental employees,” Davis wrote. “RICHARDSON thinks this is incompetence on the part of USVI executive leadership.”
