The former owner of a Dallas-area school received more than nineteen years in federal prison for fraud. Authorities allege that Jonathan Davis defrauded the Department of Veterans Affairs (VA) out of about $70 million.
Davis, 43, is also accused of misleading some student veterans who enrolled in his for-profit school, Retail Ready Career Center, in Garland. The school, which no longer exists, received about $70 million in GI Bill money.
Prosecutors say that Davis came up with the idea to market his school’s six-week HVAC training course to veterans when he was financially down. According to court records, he realized that he could get up to $21,000 from each student whose payments are meant to be covered by the Veterans Educational Assistance Act of 2008, also known as the Post-9/11 GI Bill. For his idea to be successful, the VA, the Texas Workforce Commission, and the Texas Veterans Commission needed to officially approve the project.
Officials say that Davis lied by saying that he wasn’t facing any criminal or civil actions at the time. He also falsely claimed that his school was an established institution in good financial condition. Contrary to his claims, Davis was facing “numerous civil judgments over unpaid debts,” authorities said. Authorities also said that he had a pending felony charge for theft of services. Davis falsified the financial statements he presented to the state agencies, according to investigators.
The U.S. Attorney’s Office also said that some of Davis’ former students testified during the trial. Jurors heard that the former students felt used and deceived, claiming that Retail Ready failed to teach them many of the skills they were meant to learn – most of which were basic skills necessary for entry-level technician jobs.”
A federal jury convicted Davis of seven counts of wire fraud and four counts of money laundering in April. A personal journal where he described his lies and fraud was discovered and seized by agents. Authorities said that the recording became a key piece of evidence against Davis in his trial. “Several decisions lie ahead that will ultimately make the difference if I succeed or if I fail,” Davis wrote in the electronic journal that he kept on his computer. “More gut-wrenching conversations, more humiliating experiences, more lying is in order,” he continued.
During the Wednesday sentencing in Dallas federal court, U.S. District Judge Brantley Starr further ordered Davis to pay $65 million in restitution. He also ordered him to forfeit $72 million to the Federal government.
Acting U.S. Attorney Prerak Shah said in a statement that Davis’ crimes were acts of disrespect to the sacrifices made. She also noted that the district is happy that they could put him in prison for such a significant period of time.
Derek Staub, a lawyer representing Davis, argued that the charges did not describe criminal behavior but were allegations of civil regulatory violations. According to Staub, many of the graduates at Retail Ready Career Center were satisfied with the quality of education his client provided. The company also said in court records that the school’s graduation rate was 89% and that it had a placement rate of 81% in its final year.
