Democratic Congressional Candidate Indicted in $803,000 Fraud, Embezzlement Case

A Democratic congressional candidate in Virginia has been indicted on charges of fraud, embezzlement, and theft for allegedly stealing government funds from a school nutrition program in 2012.
Shaun Brown, 58, denied any wrongdoing during her first appearance in a Norfolk courtroom last week and said after the hearing that she intends to fight the charges.

Prosecutors said Brown fraudulently obtained $803,000 of government funds through her nonprofit organization, which participated in the U.S. Department of Agriculture’s (USDA) Summer Food Service Program. The organization worked with the USDA Summer Food Service Program to provide meals to low-income children on school breaks.
Brown allegedly got the money by filing fraudulent reimbursement claims with the Virginia Department of Health.
Prosecutors said Brown and other staff members of her nonprofit told employees to skew data, such as the number of meals provided to low-income children, so the nonprofit could cash in on the extra reimbursements from the government, the Washington Post reported.
Brown chalked off the “irregularities” in the data to problems with the program.
“I want the irregularities corrected,” she said. “I want to see the program improve.”
Brown and her mother, Jenever, who co-founded the nonprofit, filed a $10 million lawsuit against the USDA, the Virginia Department of Health, and others this month for allegedly discriminating against African Americans, delaying payments, and falsifying reimbursements and claims.
Brown ran against Rep. Scott W. Taylor (R-VA) for Virginia’s 2nd Congressional District in 2016, but she lost to Taylor by 23 points.
Brown announced in July that she intends to launch another congressional bid for that seat in 2018.
A third Democrat announced this week that she’s seeking her party’s nomination next year to take on freshman Rep. Scott Taylor, a Republican.
Businesswoman Shaun Brown, whom Taylor defeated when he won the 2nd Congressional District seat in November, said Thursday she’s running again because of concerns about the policies of President Donald Trump and the Republican majority.
“I’m in,” Brown said. “There’s such a concern about building a resistance movement and a firewall against the Trump administration. I believe we have to not just build a firewall, but we have to talk about what we are going to do as the Democratic Party.”
Brown, 58, operates Bold Connections, a trade and asset-management firm. She said Taylor’s support for Trump makes him vulnerable.
Brown, who was a delegate for Vermont Sen. Bernie Sanders at the 2016 Democratic National Convention, said she favors establishing a universal health care system .
She has moved from Hampton to Virginia Beach since last year’s election in which Taylor won 61 percent of the vote and she collected 38 percent. Brown also has lived in Newport News, where she ran unsuccessfully three times for City Council and once for the General Assembly.
Although no candidate can formally file for the party nomination until 2018, Brown’s announcement came the same week that two other Beach residents said they’re running. Retired Air Force officer and businessman Dave Belote, who heads the city’s Democratic Party, and Garry Hubbard, a retired owner of a construction firm, announced their candidacies Wednesday.
Brown said in an email that Belote should step down from his party post “in the interest of fairness and avoiding even the appearance of a conflict of interest.’’
Democrats are expected to choose their nominee next year with either a convention or primary well in advance of the November general election. Taylor also would have to seek the GOP nomination but, as the incumbent, he has an advantage because of his position and fundraising.
The 2nd District includes all of Virginia Beach and Virginia’s Eastern Shore as well as Norfolk’s north side and several localities on the Peninsula, including Williamsburg and York County.
The Hampton native held a press conference in Newport News to declare her innocence and a commitment to her nonprofit JOBS Community Development Corp. and its mission to feed needy children throughout Virginia.
Brown, 58, who is seeking the Democratic nomination for the 2nd Congressional District seat next year, was indicted Thursday on three counts of fraud, embezzlement and theft allegedly occurring in 2012.
She has been charged with wire fraud and theft of government property, and faces a maximum penalty of 20 years in prison if convicted.
“We will vigorously defend. She maintains her innocence,” said her attorney, Jimmy Ellenson.
He said there’s been “a longstanding dispute between her and the feds about this whole thing,” adding that the timing of the criminal complaint seems unusual, given Brown’s own recent lawsuit.
“And why would they do this right before Christmas?” he asked.
In the lawsuit, which she filed without a lawyer, Brown says she and her mother filed a civil rights complaint against USDA alleging the agency’s summer food program discriminated against them.
The lawsuit says the USDA, state health department and five officials unlawfully delayed payments, and falsified reimbursements and claims for reimbursements.
Brown alleged that USDA officials in 2016 derailed JOBS’ efforts to secure financing to “satisfy its prior financial commitments for 2012, outstanding bills from the summer of 2012 and $625,000 to purchase” a restaurant that the company hoped to use as a central kitchen for its summer feeding programs. Her lawsuit says that calls from state health officials to a funding group and to her supplier upset agreements JOBS hoped to arrange. It adds that the state’s designation of JOBS as a “high risk auditee” after 2012 cut it out of the summer program. The lawsuit says the state has falsely claimed JOBS was involved in fraud.
The suit seeks $10 million in damages.
Brown asked the U.S. District Court in Alexandria to appoint an attorney for her, but Judge Liam O’Grady denied the request, saying that the exceptional circumstances that allow judges to do so in civil lawsuits did not exist in her case.
Her campaign finance reports with the Federal Election Commission show she’s raised $713,491 as of the end of October, all but $2,750 of which came from her. She said most of that was in the form of stock in her company. The FEC report shows she has no cash on hand in her campaign account.


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