Dallas HVAC commerce college proprietor will get virtually 20 years for fraud

The former owner of a school in Dallas that trained military veterans in the heating and air conditioning industry has been sentenced to more than 19 years in federal prison for defrauding Veterans Affairs out of about $ 70 million, authorities said.

Jonathan Davis, 43, also misled student veterans attending his for-profit school, the Retail Ready Career Center, in Garland.

The school, which has since been closed, received around 70 million US dollars in GI Bill funds, making it one of the largest recipients of a business school. He has been in federal custody since April when a federal jury convicted him of seven cases of transfer fraud and four of money laundering.

Davis’ own words describing his lies and betrayal – recorded in his personal diary, which was confiscated by agents – helped seal his fate, authorities said.

“There are several decisions ahead of me that will ultimately determine success or failure. More heartbreaking conversations, more humiliating experiences, more lies are in order, ”Davis wrote in an electronic diary he kept on his computer.

The magazine, where he was worried about money and dreamed of getting rich, became major evidence against Davis during nearly two weeks of trial in Dallas federal court, officials said. When the money started flowing, Davis went on a shopping spree buying a $ 2.2 million home in Dallas, a $ 428,000 Lamborghini, a $ 280,000 Ferrari, and a $ 260,000 Bentley, the shared Prosecutors with.

During Wednesday’s verdict, District Judge Brantley Starr also ordered Davis to pay $ 65 million in redress and forfeit $ 72 million to the federal government.

“A jury found that Mr. Davis lied to several government agencies and filled his pockets with the benefits of the Veterans’ GI Bill, even though they were having a hard time getting around,” Acting US Attorney Prerak Shah said in a statement. “Sir. The crimes of Davis were a slap in the face to the sacrifices our soldiers made, and we are proud to have put him behind bars for such a long time.”

Derek Staub, an attorney for Davis, had argued that the charges were civil law violation allegations, not crime.

The Retail Ready Career Center suddenly closed on September 27, 2017 when federal agencies were investigating the for-profit school.(Eva-Marie Ayala / Dallas Morning News)

Staub said many of his client’s graduates were satisfied with their training. The school’s graduation rate was 89% and it had a placement rate of 81% last year, the company said in court records.

Davis previously told The Dallas Morning News that many of his students were stranded outside of the state in 2017 when agents raided the school.

He filed several legal suits against the government’s civil recovery procedures against him, which were unsuccessful. And Davis sued the government on behalf of Retail Ready in September 2019, alleging, among other things, a violation of the Fourth Amendment, which protects against improper searches and seizures.

The school provided accommodation assistance to students in local hotels that included meals and transportation. Retail Ready has trained more than 2,500 employees, some of whom went into jobs that paid more than $ 75,000 a year, the company said. More than 90% of students were veterans, school officials said, most of whom needed financial help.

Davis was charged in November, about three years after filing federal civil forfeiture proceedings, which resulted in the confiscation of his bank accounts and other assets.

Davis was broke when he hit on the idea of ​​marketing his school’s six-week HVAC training course to veterans, prosecutors said.

He realized that he could charge up to $ 21,000 per student for the course – this is payable under the Veteran’s Educational Assistance Act of 2008, also known as the Post 9/11 GI Bill, according to court records.

Davis first needed official approvals from the VA as well as the Texas Workforce Commission and Texas Veterans Commission, officials said. To obtain those permits, Davis lied, claiming he had not taken any criminal or civil action at the time and that his school was an established institution in good financial shape, prosecutors said.

However, Davis “faced numerous civil unpaid debt rulings,” authorities said, and he was charged with theft of services.

Davis also told the Texas Veterans Commission that he ran his school for two years when it only existed for a few months and didn’t educate a single student, prosecutors said. Retail Ready didn’t even have a building or basic utility by the time Davis said the government said Davis was ready to begin class.

The federal authorities said that he had also submitted false financial reports to the state authorities.

“I lied to the accountant I use for my auditing, I told him that I have nothing but a lease in the company name … and that I have a bank account with expenses because it … is a disaster and it would not be a very great deal Project a good image, ”Davis wrote in his diary.

In 2014, he began recruiting veterans for his school and promised them success. However, many of its graduates found that Retail Ready did not teach them “many of the basic skills required for entry-level technician jobs,” according to prosecutors. Some of these former students testified during the trial, telling jurors that they felt they had been exploited and deceived, the U.S. Attorney’s Office said.