Pennsylvania Developer Gets Seven-Year Sentence For Federal Fraud And Money Laundering
By: John A. Schwab
Yesterday, developer David R. Dodd II was sentenced by Senior U.S. District Court Judge Sylvia H. Rambo to 87 months in federal prison for orchestrating a massive fraud scheme involving federal funds and laundered money. The scheme involved fraudulent real estate and business deals associated with the Capitol View Commerce Center (“CVCC”), an unsuccessful construction project in Harrisburg, Pennsylvania. Prosecutors alleged that Dodd used his business, Industrial Design and Construction Inc. (“IDC”), to purchase building materials in the construction for the CVCC project. He concealed his personal interest in IDC which violated federal conflict of interest requirements and, as a result of that concealment, illegally obtained over one million dollars of funds from HUD through programs administered by the City of Harrisburg and Dauphin County. Dodd then directed the funds to be transferred into a brokerage account in an effort to conceal his ownership of the misappropriated funds.
In addition to the prison sentence, Dodd was ordered to pay restitution of approximately $21 million to the City of Harrisburg, Dauphin County, lenders, suppliers, and subcontractors involved in the CVCC project. The impact on the City of Harrisburg and Dauphin County alone was significant involving over $3.8 million and $2.7 million, respectively. As part of the plea agreement, Dodd agreed to forfeit $1.15 million in brokerage accounts, a BMW X-5, a Mercedes Benz sedan, and over $50,000 in cash. Prosecutors initially requested a nine-year prison sentence but reduced their request after Dodd agreed not to appeal Judge Rambo’s $21 million restitution order.
The scheme came to light during a probe that began in early 2008 after unpaid contractors refused to perform further work on the project. It was then revealed that, although Dodd received the funds to pay the contractors, he retained the money and did not pay them as he was obligated to do.