The V.I. Justice Department has rejected calls to sever the cases of three co-defendants accused of bilking taxpayers through a $4 million federal contract to store wood for the territory’s hurricane recovery.
The trio was arrested in June after a federal grand jury returned an indictment charging Davidson Charlemagne of St. Croix with government program fraud, wire fraud, and money laundering conspiracy; Sasha Charlemagne, his wife, with money laundering conspiracy; and Darin Richardson of St. Thomas with criminal conflict of interest and making materially false statements. The indictment also names an unindicted co-conspirator, referred to as “Individual One.”
According to court documents, the charges stem from a two-year FBI investigation into a 2020 V.I. Housing Finance Authority contract for the storage and management of wood that was shipped to the territory to be used for the reconstruction of commercial and residential buildings following hurricanes Irma and Maria in 2017.
Last month, the Charlemagnes filed separate motions to have their cases severed from that of Richardson, contending that they are not charged with a conspiracy and have not been accused of working together to commit the same crimes. Last week, Richardson argued the same in a motion to have his case heard separately from the Charlemagnes.
In a response filed Thursday in V.I. District Court, the U.S. Attorney’s Office rejected those claims.
“All three defendants make much of the fact that the government has not charged them with a conspiracy, and they highlight the obvious by noting Davidson and Sasha Charlemagne are charged with one set of offenses … while Darin Richardson is charged with a separate set of offenses,” the response states.
“The defendants further complain about ‘the government’s attempt to use Individual One as a bridge between Charlemagne and Richardson,’ because, in their telling, the Charlemagnes and Richardson were engaged in wholly separate crimes somehow disconnected from each other,” it says.
“However, this is where all three defendants’ arguments fail inasmuch as they argue that they did not participate in the same act or transaction, or as part of a common scheme or plan. To the contrary, while the three defendants in this case are charged with committing different offenses, all three of them were engaged in the same ‘series of acts or transactions, constituting an offense or offenses,’” as required under the Federal Rules of Criminal Procedure governing the joinder of cases, the government responded.
“Consequently, joinder was proper at the inception of this case and the Court should deny the defendants’ motions to sever,” it said.
According to the U.S. Attorney’s Office, all three were involved in a coordinated scheme to defraud the Department of Housing and Urban Development in connection with the 2020 contract issued by the VIHFA for managing the lumber piles on St. Croix and St. Thomas that was funded by HUD through the Community Development Block Grant Disaster Recovery program.
The indictment alleges that Davidson Charlemagne arranged for “Individual One” to submit a bid on behalf of ISG, and D&S Trucking, owned by the Charlemagnes, would subcontract to perform the majority of the work.
The bid, totaling nearly $3 million, included inflated labor costs, according to the complaint, and was ultimately awarded by Richardson, who at the time was the chief operating officer of VIHFA.
Richardson had significant control over the procurement process and allegedly manipulated the evaluation of bids to favor ISG’s proposal, according to the complaint.
It further alleges that after the contract was awarded, its value was increased by $1 million under false pretenses, with the length of the contract inaccurately extended. These actions resulted in significant financial gain for the Charlemagnes, facilitated by Richardson’s misuse of his official position, according to the court filings.
Meanwhile, the lumber on St. Croix and St. Thomas remained almost entirely unused and stacked on pallets outdoors and exposed to the elements for more than three years. Moreover, the St. Croix woodpile was stored rent-free at Henderson Elementary School — meaning the government was paying millions to store its own property on its own land — the Justice Department alleges. Davidson Charlemagne is territory facilities manager for the V.I. Education Department, at a salary of $90,000 per year, according to the Division of Personnel employee database.
The government also claims that Richardson received a $107,000 payment from “Individual One” as a result of his role in the scheme, and that the actions of each defendant were integral to its success.
Additionally, separating the cases would undermine the efficiency of the trial process and could result in inconsistent verdicts, it said.
The government also emphasized that much of the evidence required to prosecute Richardson would overlap with the evidence against the Charlemagnes, further supporting the decision to keep the cases joined.
Judge Wilma Lewis is presiding over the case and had not ruled on the matter as of Friday.
