Richmond defunct business indicted for federal charges

Richmond defunct business indicted for federal charges

RICHMOND, VA (WWBT) - The executives of a now defunct Richmond company are accused of stealing hundreds of thousands of dollars in US stimulus money.

A 28 count indictment from a federal grand jury alleges Cephas Industries and it's owners, Morris and Chiroya Cephas stole $340,477 in money provided by the American Recovery and Reinvestment Act of 2009. The money was meant to create jobs on the city's southside. The federal government accuses Cephas Industries, and its husband and wife owners of not only stealing the money and using it for themselves, but also of lying to the government.

In 2013 Investigative Reporter Rachel DePompa tracked the stimulus money and exposed the alleged fraud to the Virginia Department of Mines, Minerals and Energy (DMME). The DMME awarded Cephas Industries $500,000 in stimulus money. The DMME immediately started investigating and, with the help of the Office of the State Inspector General (OSIG), turned over its case to the Department of Energy Office of Inspector General.

In the indictment the federal government accused Cephas of attempting to obstruct a federal investigation, using 340,000 in federal funds for personal use, never developing the recycling center required by the grant.

In October of 2013, Rachel DePompa discovered that equipment purchased with the grant money was sold out of state. Equipment purchased with grant money is not allowed to be sold without government permission.

The indictment alleges that Morris and Chiroya Cephas requested $200,000 in Recovery Act funds from DMME for a down payment towards the purchase of an excavator from a construction company in Ashland, Va.  The government alleges they told the DMME the purchase price for the excavator was $209,475, but the government says they really paid only $115,500 for it and kept the extra $93,975. The indictment alleges that money was used to pay delinquent accounts. The indictment also says they sold the excavator without consent.

The feds allege Morris and Chiroya used the stimulus money to pay for personal delinquent taxes, payments for a rental property and credit card bills.

The indictment was filed on October 6th.

We've reached out to Morris and Chiroya Cephas on multiple occasions and left multiple messages and emails. We briefly reached Morris in late 2013. He told us he'd have is attorney call us. The attorney never called.  We tried again today with no success.

The Cephases are scheduled to make their first court appearance at 3:15 p.m.

An spokesperson with the OSIG said in a statement today, "[We are} very proud of the work are agency did to get to this point."

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