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Posted at 7:51 AM ET, 01/25/2011

Guilty plea in Va. historic rehab deals

By The Associated Press

A Richmond real estate developer pleaded guilty Monday to defrauding federal and state tax credit programs for rehabilitation of historic properties.

Justin Glynn French, 40, admitted obtaining $7 million to $20 million more than he was entitled to receive from tax credit programs operated by the U.S. Department of the Interior and the Virginia Department of Historic Resources.

French faces up to 30 years in prison and a $500,000 fine for mail fraud and engaging in unlawful monetary transactions. He also agreed to make full restitution and to forfeit at least $7 million in assets, including a $2 million home and an extensive art collection.

U.S. District Judge John A. Gibney scheduled sentencing for May 3.

"Justin French stole millions from taxpayers to get rich and establish a prominent place in the real estate market in Richmond," U.S. Attorney Neil H. MacBride said after the plea hearing. "Today, Mr. French admitted that his greed led him to defraud federal and state programs that were intended to revitalize historic Richmond."

At the plea hearing, French answered "Yes, your honor" when asked if he was pleading guilty because he is, in fact, guilty of the federal charges. Gibney said French will have an opportunity to make a statement at sentencing. French remains free under court orders not to leave the area.

According to court papers, French said that since 2005 he has sought historic rehabilitation tax credits on at least 35 properties in Richmond. The wire charge fraud was based on French's 2008 purchase of a property for $700,000, with expected rehabilitation costs of about $200,000.

In his applications to the tax credit programs, however, French listed the rehabilitation costs at more than $1.5 million. As a result, he received tax credits of more than $707,000 -- nearly $556,000 more than he was entitled to receive.

French admitted in the plea agreement that the tax credits he sought on other properties were similarly inflated.

The unlawful monetary transactions charge stems from French's sale of the tax credits to private investors.

MacBride and Virginia Attorney General Kenneth Cuccinelli said the joint federal-state investigation into French's dealings is continuing.

By The Associated Press  | January 25, 2011; 7:51 AM ET
Categories:  From the Courthouse, Virginia  
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