Financial Crime: ‘Bamboozled’: Texas for-profit school operator took $72M in veterans’ GI Bill cash and bought mansion, Lamborghini, Ferrari


The owner of a fly-by-night Texas trade school has been sentenced to nearly 20 years in prison for taking $72 million in GI Bill cash to give veterans HVAC training but leaving them lacking even basic skills.

Prosecutors say Jonathan Dean Davis, 43, charged up to $21,000 for a six-week program at his Retail Ready Career Center near Dallas, draining their GI Bill benefits but giving them little marketable training in heating and air conditioning repair.

When veterans would try to find work after completing the program, they would discover they were woefully underprepared for even entry-level technician jobs, prosecutors said.

Veterans said they were ‘bamboozled’

Several veterans testified at Davis’ trial that they felt “used,” “taken advantage of,” “deceived,” and “bamboozled,” after discovering that much of the post-military education benefits had been used up through the school.

Prosecutors say that in all, Davis billed the U.S. Department of Veteran Affairs $72 million to train veterans, big chunks of which he used to buy a $2.2 million mansion in Dallas, a $428,000 Lamborghini, a $280,000 Ferrari, and a $260,000 Bentley.

He was found guilty by a jury in April of seven counts of wire fraud and four counts of money laundering. In addition to his prison sentence, Davis was ordered to pay $65.2 million in restitution and forfeit $72.5 million to the federal government.

“‘Mr. Davis’ crimes were a slap in the face to the sacrifices made by our servicemembers.'”

— Prerak Shah, acting U.S. Attorney for the northern district of Texas

“A jury found that Mr. Davis lied to multiple government agencies, lining his pockets with veterans’ GI Bill benefits even as they were struggling to scrape by,” said Prerak Shah, acting U.S. Attorney for the northern district of Texas. “Mr. Davis’ crimes were a slap in the face to the sacrifices made by our servicemembers.”

Messages left with Davis’ attorneys weren’t immediately returned. They have said in the past that they considered the case an example of government overreach and that they plan to appeal.

“‘More lying is in order.'”

— Excerpt from an electronic journal kept by Davis that prosecutors submitted as evidence in the case

Prosecutors say Davis decided to launch the school in 2013 when he realized he could collect tens of thousands of dollars from the government under the post-9/11 GI Bill that was passed in 2008.

To access those funds, Davis required approvals from the Texas Workforce Commission and the Texas Veterans Commission. To get those approvals, prosecutors say Davis lied repeatedly on his applications — including claiming he wasn’t facing any civil or criminal actions, when he in fact had multiple cases against him for unpaid debts and a pending felony charge for theft of service, which was later dismissed.

He also claimed on his applications that his school had been operating for two years and was well established, when it had only existed for a few months and had never trained anyone.

“Several decisions lie ahead that will ultimately make the difference if I succeed or if I fail. More gut-wrenching conversations, more humiliating experiences, more lying is in order,” Mr. Davis wrote in an electronic journal he kept on his computer, which was recovered by federal agents during a search of Retail Ready. The journal became a key piece of evidence at trial.

Based on those lies, Davis’ applications were eventually approved and he was able to start charging tuition payments to the Veterans Administration for veterans he promised to train for lucrative careers in the heating and air conditioning industry. But prosecutors say the courses failed to teach basic skills.

In court filings, Davis’ attorneys didn’t deny that Davis had lied in his applications but argued that the scope of the punishment he faced had “no connection to the seriousness of the offense.”

: Tesla expands ‘Full Self-Driving’ beta tests as proxy group urges board shakeup

Previous article

The Moneyist: My son is married to a selfish, passive-aggressive woman. How can I leave him money without her getting her hands on it?

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in News