Richard Foster Archives - Page 18 of 48

Trustify CEO charged with defrauding investors

Daniel Boice, CEO and founder of Arlington-based tech startup Trustify Inc., was charged by federal prosecutors Monday with fraud and money laundering charges related to a scheme to defraud investors of $18.5 million. In a parallel action, the Securities and Exchange Commission also charged Trustify Inc. and Boice with violating the antifraud provisions of the federal securities law.

In an indictment unsealed Monday, Boice was was charged with five counts of wire fraud, one count of securities fraud and two counts of money laundering. FBI officials and U.S. Attorney for the Eastern District of Virginia G. Zachary Terwiliger allege in the indictment that Boice fraudulently solicited $18.5 million from more than 90 investors in his company, which connected customers with private investigators, by falsely overstating Trustify’s financial performance. The indictment states that Boice also lied to investors about how much money he would receive from the investment funds and that he diverted a substantial amount of the money for his own benefit.

According to the SEC complaint, Trustify and Boice falsely claimed it had lucrative corporate clients, thousands of investigators in its network and growing revenues, but in actuality it was unable to pay its employees or vendors and had effectively ceased operations. According to the SCC, Boice used at least $8 million in funds from investors to charter private jets and buy vacations, a luxury car and jewelry and make mortgage payments. He also allegedly diverted payments to his purported consulting company, GoLean DC LLC.

The SEC is seeking permanent injunctive relief and civil penalties from Trustify and Boice, as well as repaying defrauded investors with interest.

“As alleged in our complaint, Boice and Trustify lied to investors about their failing business to give the appearance of a thriving technology startup, while misappropriating investor funds to support an extravagant lifestyle,” said Kelly L. Gibson, director of the SEC’s Philadelphia regional office. “The scheme resulted in millions of dollars in investors losses, and the SEC will do all it can to hold the defendants accountable.”

Atlantic Coast Pipeline canceled

Despite a favorable recent U.S. Supreme Court ruling, Dominion Energy Inc. and Duke Energy Corp. announced Sunday that they are abandoning plans to build the controversial, long-delayed Atlantic Coast Pipeline. The 600-mile, $8 billion-plus natural gas pipeline was supposed to run from West Virginia through Virginia to eastern Northern Carolina.

At the same time, Dominion also announced that it has entered into a definitive agreement to sell off its Gas Transmission & Storage segment assets to an affiliate of Berkshire Hathaway for $9.7 billion, including the assumption of $5.7 billion in existing debt. The deal includes more than 7,700 miles of natural gas storage and transmission pipelines and about 900 billion cubic feet of gas storage. Assets covered by the agreement include Dominion’s interests in Dominion Energy Transmission, Questar Pipeline (including Overthrust and White River Hub), Carolina Gas Transmission, Iroquois Gas Transmission System (50% interest), legacy gathering and processing operations, farmout acreage, as well as a 25% operating interest in the Dominion Energy Cove Point gas liquefaction facility in Maryland.

Dominion Energy Chairman, President and CEO Thomas F. Farrell II said in a statement that the company was taking the action as part of a “narrowing of focus,” repositioning Dominion strategically with a pure-play focus on its “state-regulated, sustainability-focused utilities” business.

Moving forward, Richmond-based Dominion Energy expects as much as 90% of its future operating earnings will come from its portfolio of electric and natural gas state-regulated utility companies in Virginia, North Carolina, South Carolina, Ohio and Utah.

“This narrowing of focus will also allow us to increase our long-term earnings growth rate guidance by around 30%. Our rebased dividend policy better reflects our revised operating and financial strengths, aligns with our best-in-class industry peers and allows us to grow our dividend much more rapidly than before,” Farrell said. “This transaction represents another significant step in our evolution as a company, allowing us to focus even more on fulfilling utility customer needs and positioning us for a bright and increasingly sustainable future.”

Speaking about the deal in a statement, Berkshire Hathaway Chairman Warren Buffett said, “I admire Tom Farrell for his exceptional leadership across the energy industry as well as within Dominion Energy. We are very proud to be adding such a great portfolio of natural gas assets to our already strong energy business.”

Dominion’s interest in the Atlantic Coast Pipeline was not part of the deal with Berkshire Hathaway.

In a joint statement about the pipeline decision, Dominion’s Farrell and Duke Energy Chair, President and CEO Lynn J. Good said, “We regret that we will be unable to complete the Atlantic Coast Pipeline. For almost six years we have worked diligently and invested billions of dollars to complete the project and deliver the much-needed infrastructure to our customers and communities. Throughout we have engaged extensively with and incorporated feedback from local communities, labor and industrial leaders, government and permitting agencies, environmental interests and social justice organizations. We express sincere appreciation for the tireless efforts and important contributions made by all who were involved in this essential project. This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States. Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged.”

In a news release Sunday, Dominion Energy and Charlotte, North Carolina-based Duke Energy cited recent federal court rulings on the Keystone XL pipeline construction on Montana, which are likely to be appealed to the U.S. Supreme Court, as adding increased litigation risks and “an unacceptable layer of uncertainty and [additional] anticipated delays” for the Atlantic Coast Pipeline project, which had already ballooned in estimated costs from around $4.5 to $5 billion to more than $8 billion.

Announced in 2014 and originally planned to begin transporting natural gas by late 2019, the Atlantic Coast Pipeline was delayed by legal proceedings and opposition from environmental groups and landowners in the pathway of the pipeline’s construction route. On June 15, the U.S. Supreme Court handed down a ruling that would have allowed the pipeline to cross under the Appalachian Trail, hailed by Dominion and Duke as a major victory toward completing the pipeline, which was identified by the Trump administration as a priority infrastructure project. Before announcing the project’s cancellation, Dominion and Duke had hoped to put the pipeline into operation by 2022.

Virginia Chamber of Commerce President and CEO Barry DuVal issued a statement saying that the loss of the pipeline “detrimentally impacts the commonwealth’s access to affordable, reliable energy … [and] demonstrates the significant regulatory burdens businesses must deal with in order to operate.” The project’s cancellation is a significant economic development loss for Virginia, DuVal said, as it was projected to generate 8,800 jobs and result in $1.4 billion in economic activity during construction, as well as supporting more than 1,300 permanent jobs and $10.4 million in local tax revenue in the pipeline’s three-state region.

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Ex Chesterfield pharma CEO pleads guilty in federal opioid treatment investigation

Shaun Thaxter, former CEO of Chesterfield County-based pharmaceutical manufacturer Indivior PLC, pleaded guilty Tuesday in federal court in Abingdon to a misdemeanor criminal charge related to the U.S Justice Department’s probe into the marketing of Suboxone, Indivior’s opioid addiction treatment drug.

Thaxter pleaded guilty to one count of violating the Federal Food, Drug, and Cosmetic Act in connection with Indivior’s misrepresentations to the Massachusetts state Medicaid program regarding the safety of Suboxone Film, a product made and marketed by Indivior. He has agreed to pay $600,000 in fines and forfeiture and faces up to one year in prison. He will be sentenced on Sept. 29 by U.S. District Court Judge James P. Jones in Abingdon.

“The public must be able to trust pharmaceutical manufacturers and their executives — particularly when they are marketing powerful opioids,” said First Assistant U.S. Attorney Daniel P. Bubar of the Western District of Virginia. “While he was the top executive of Indivior, Shaun Thaxter violated that trust, and must be held accountable.”

Indivior, a spinoff of British firm Reckitt Benckiser Group (RB Group), announced Monday that Thaxter had stepped down as CEO and was being replaced by Mark Crossley, the company’s chief financial and operations officer and executive director. Last year, RB Group agreed to pay $1.4 billion to the federal government and various states to resolve its potential criminal and civil liability in the Suboxone investigation.

Suboxone contains a combination of buprenorphine, a powerful and addictive opioid, and naloxone, an opioid overdose reversal drug. It is approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while receiving treatment for addiction.

According to criminal complaint filed by the U.S. Attorney’s Office for the Western District of Virginia, Thaxter asked Indivior employees to come up with a plan to get the Massachusetts Medicaid agency, MassHealth, to use Suboxone Film instead of a competitor’s non-opiate treatment. According to a news release from the U.S. Department of Justice, “Certain Indivior employees subsequently shared false and misleading safety information with MassHealth officials about Suboxone Film’s risk of accidental pediatric exposure. Two months after receiving that false and misleading information, MassHealth announced it would provide access to Suboxone Film for Medicaid patients with children under the age of 6.”

“By valuing profits over patients, Thaxter’s directions endangered numerous Medicaid beneficiaries and their families, especially young children, with accidental opioid exposure. When treatment medications are used, it is essential they be prescribed carefully, legally and based on accurate information, to protect the health and safety of patients in federal health care programs,” said Elton Malone, assistant inspector general for investigations with the Office of Inspector General of the U.S. Department of Health and Human Services.

A federal criminal case is still pending against Indivior, which was indicted in April 2019 for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone. The federal criminal trial against Indivior is scheduled to begin on Sept. 28 in U.S. District Court in Abingdon.

“I look forward to working with the board to deliver the full potential of our key assets, to resolve outstanding investigations and litigations as expeditiously as possible, and to ensure that we continue to play a leading role in helping patients, doctors, and communities fight the human crisis of opioid addiction,” Crossley, Indivior’s new CEO, said in a statement Monday.

Thaxter had been the head of Indivior since 2009, when it was still known as Reckitt Benckiser Pharmaceuticals. Indivior was a U.S. subsidiary of the British consumer goods conglomerate until it was spun off as a separate business in December 2014.

In a statement released Monday, Thaxter said, “It has been an honor and a privilege to lead the development of Indivior as it focused on empowering individuals to overcome their addiction. We have truly been pioneers in developing new treatments and helping to change patients’ lives. Indivior has a highly talented management and workforce. I am confident in their ability to deliver against its vision as I prepare for my next business challenge.”

Northam bans congregating in bars as Phase Three starts

As Virginia enters Phase Three of the state’s Forward Virginia reopening plan on Wednesday, July 1, Gov. Ralph Northam announced that bar seating and congregating areas of restaurants will remain closed. Restaurants will be permitted to use non-bar seating in the bar area, so long as tables are at least six feet apart.

While key health metrics still look good in Virginia, other states — especially those that reopened earlier, such as Florida and Texas — have been seeing record surges in coronavirus cases over the last two weeks. Northam said Tuesday that he was prepared to pull back on reopening Virginia and institute tighter restrictions if needed.

“I am watching what is happening in other states — we are taking a cautious approach as we enter Phase Three and maintaining the current restrictions on bar areas,” Northam said in a statement Tuesday. “In Virginia, our hospitalization rates have fallen, our percentage of positive tests continues to trend downward, and we are conducting more than 10,000 tests each day. We want these trends to continue, but if our public health metrics begin moving in the wrong direction, I will not hesitate to take action to protect the health and safety of our communities.”

Nevertheless, Phase Three will still see many restrictions lifted, including:

- Social gatherings of up to 250 people allowed.
- Occupancy/capacity limits will be lifted on retail stores and restaurants (except for the new rules prohibiting bar seating and congregation).
- Museums, zoos and other outdoor entertainment venues will be allowed to open at 50% capacity, serving a maximum of 1,000 people.
- Gyms and fitness centers will be allowed to operate at up to 75% capacity.
- Personal grooming and hair salons will still need to follow physical distancing requirements.
- Child care facilities will remain open.
- Recreational sports will still require physical distancing.
- Swimming pools will be able to operate at up to 75% capacity, with physical distancing in place.

Face coverings will still be required in indoor public spaces, and Northam said Tuesday that teleworking and social distancing are still “strongly encouraged.”

During a news briefing last week, Northam said Virginians will still be safer at home during Phase Three, especially if they’re medically vulnerable. “We’re still strongly encouraging teleworking. People still need to focus on physical distancing in all situations outside of their home. Face coverings are still the right thing to do in indoor, public spaces,” Northam said. “I want to reiterate that everyone should continue to take this pandemic very seriously. Cases are on the rise in many other states, as I said previously. I do not want to see that happen in the commonwealth. Be cautious and take the necessary steps to protect yourself and the people around you.”

Virginia Business wins two national journalism awards

Virginia Business won two national journalism awards Thursday at The Alliance of Area Business Publishers’ (AABP) Editorial Excellence awards.

The magazine placed gold in the “best feature” category for freelance writer Greg Weatherford’s November 2019 cover story, “The rise of the millennials,” which focused on the generation’s ascendance as America’s largest workforce population.

In the comments for the gold award, the judges praised Weatherford for a “vital and timely story with a fitting edge to its writing. … Solid anecdotes make for a lively read.”

Another piece by Weatherford, a December 2019 cover story profile of Virginia Economic Development Partnership CEO Stephen Moret, took the silver award for “best personality profile.”

Speaking about Weatherford’s profile of Moret, the judges said, “The writer delivers a thoughtful profile of one of Virginia’s top business rainmakers. … Instead of a rah-rah feature, though, the writer takes a page from the ‘Seven Habits of Highly Effective People,’ leveraging Moret’s work as an inspirational and practical blueprint for winning in the workplace.”

The awards were judged by 24 faculty members from the University of Missouri School of Journalism. Nearly 450 entries were submitted from 34 of the AABP’s 55 member publications. The awards ceremony was held virtually as part of the AABP’s four-day annual conference.

AABP is a Norwalk, Connecticut-based nonprofit organization representing business publications in the United States, Canada and Australia.

Associated General Contractors of Virginia picks new CEO

The Associated General Contractors of Virginia (ACG-VA) has named Brandon Robinson as its new CEO, effective July 20.

He replaces Gordon N. Dixon, who became executive vice president of the Virginia Transportation Construction Alliance (VTCA) on June 1.

Robinson formerly worked as director of policy at the Virginia Association of Health Plans, for which he lobbied the General Assembly on behalf of the health insurance industry. Prior to that, he was executive director of the Virginia Society of Association Executives.

“AGC-VA is a strong organization,” Robinson said. “I am excited to begin working with leadership to build on the foundation of success and envision a bright future focused on member value. At the end of the day, ensuring each member business finds value in this association to make them better is my focus. I cannot wait to get started.”

Robinson holds a bachelor’s degree from Mary Washington College and a master’s degree from The George Washington University’s Graduate School of Political Management. He earned the certified association executive credential in 2015.

Metro Silver Line service to resume Aug. 16

Metro will resume Silver Line service and reopen six Fairfax County stations on Aug. 16, the Washington Metropolitan Area Transit Authority announced Wednesday.

The six stations are the five “west-of-Ballston” Silver Line stations (McLean, Tysons Corner, Greensboro, Spring Hill and Wiehle-Reston East) plus one Orange Line station: West Falls Church. The remaining three west-of-Ballston stations (Vienna, Dunn Loring, and East Falls Church) are expected to reopen around Labor Day.

Metrorail ridership continues to be down about 90% compared to last year, due to the COVID-19 pandemic and construction projects.

“We appreciate the patience of our customers and the business community as we have worked to complete these projects as quickly and safely as possible,” said WMATA CEO Paul J. Wiedefeld. “By combining the schedules of our two biggest capital priorities in Virginia during a time of historically low ridership, we believe we have positioned Metro and the region for a strong recovery.”

“I am excited by the news of the earlier reopening of the Silver Line and the West Falls Church station this summer,” said Fairfax County Board of Supervisors Chairman Jeffrey C. McKay. “As our COVID-19 case data improves, we need to be able to approach reopening the region in a safe and sustainable way, while also supporting the needs of the business community.”

Free shuttle buses will continue to connect Vienna, Dunn Loring, and East Falls Church to the Metrorail system after Aug. 16; however, Vienna and Dunn Loring customers will be able to connect to Metrorail at West Falls Church, rather than Ballston. Construction activity will be ongoing at Orange Line stations, even following station reopenings.

Va. hotel revenues remain down

As the lodging industry struggles to bounce back from the economic crisis brought on by the COVID-19 pandemic, Virginia hotel revenues for the week ending June 20 dropped by 65% compared with the same period in 2019, according to new data from STR Inc., a division of CoStar Group providing market data on the hospitality industry.

For the same time period, rooms sold decreased by 49%, the average daily rate (ADR) paid for hotel rooms dropped 31% to $85.69, and revenue per available room (RevPAR), a key lodging industry metric, fell to $35.78, a 63% decline.

Hotel revenues and rooms sold declined in every major market in Virginia, compared with the same time frame last year. Compared to the same week in 2019, revenues fell 81% in Northern Virginia, 66% in Charlottesville and 49% in Hampton Roads. During the week of June 6-13, revenues fell 81% in the Northern Virginia market, 71% in Charlottesville and 47% in Hampton Roads.

Within the Hampton Roads market, hotel revenue fell 85% in Williamsburg, 43% in Virginia Beach and 41% in Norfolk/Portsmouth and Newport News/Hampton, and 37% in Chesapeake/Suffolk.

“We did not see as much improvement in room revenues or in rooms sold this week as we have seen for the last few weeks,” said Professor Vinod Agarwal of Old Dominion University’s Dragas Center for Economic Analysis and Policy. “We should brace ourselves for a continued slow rebound as the nation and the commonwealth largely reopens from COVID-19, however. It will take time for business and leisure travelers to fill rooms again.”

S.C. manufacturer relocating to Grayson County

Metalworx Inc., a manufacturer of highly-engineered and precision-manufactured components, assemblies and products for industrial uses, is investing $7.6 million to relocate its headquarters and manufacturing operations from South Carolina to the former Core Fitness Complex in Grayson County, Virginia Gov. Ralph Northam announced Wednesday.

Virginia competed with North Carolina for the project, which will create 59 jobs.

“Virginia had a strong foundation for job growth before the pandemic and Metalworx’s decision to relocate to our commonwealth demonstrates that companies remain confident in our economy and its people,” Northam said. “This project is a win-win, as the company will return a vacant facility to productive use while creating 59 high-quality jobs in Southwest Virginia and tapping into the region’s dedicated manufacturing workforce and training programs.”

Founded in Summerville, South Carolina, in 1997 by Michael and Leah Sawer, Metalworx manufactures low-to high-volume components, assemblies and products for use in industries including medicine, defense, aerospace, power generation, transportation, communications and wind energy. Metalworx partners with three related entities: Real Performance Machinery, a sawmill equipment manufacturer; Innovative Medical Solutions Group, a medical equipment mounting manufacturer; and Range of Motion Enterprises, a product development consulting firm.

“We are pleased to move forward with our expansion into Grayson County and we anticipate this will help us continue to meet our growing customer demand,” Metalworx President and CEO Michael Sawer said in a statement. “We hope to provide Grayson County and the surrounding area with skilled manufacturing employment opportunities, competitive wages and benefits, and expand our existing apprenticeship program.”

The Virginia Economic Development Partnership worked with Grayson County, the Town of Independence, Virginia’s Industrial Advancement Alliance and the Virginia Tobacco Region Revitalization Commission to secure the project for Virginia. Northam approved a $150,000 grant from the Commonwealth’s Opportunity Fund to assist Grayson County with the project. The Virginia Tobacco Region Revitalization Commission approved $265,000 in Tobacco Region Opportunity Funds for the project. Metalworx is eligible to receive state benefits from the Virginia Enterprise Zone Program, administered by the Virginia Department of Housing and Community Development, and funding and services to support Metalworx employee training activities will be provided through VEDP’s Virginia Jobs Investment Program.

Va. COVID-19 cases continue weekly decline

Virginia continues to see a weekly decline in COVID-19 cases, with the Virginia Department of Health reporting 3,579 new cases for the week ending June 22. The state reported 68 new deaths from the coronavirus during the same time period, bringing the state death toll for the pandemic to 1,620.

The state has seen 58,465 total COVID-19 cases since the pandemic began.

These are the Virginia localities that have seen 400 or more total cases, as of June 22:

Fairfax County: 13,499
Prince William County: 6,904
Loudoun County: 3,612
Chesterfield County: 2,577
Henrico County: 2,426
Arlington County: 2,424
Alexandria: 2,236
Richmond: 2,008
Manassas: 1,366
Accomack County: 1,032
Virginia Beach: 1,006
Stafford County: 930
Spotsylvania County: 909
Harrisonburg: 893
Culpeper County: 795
Chesapeake: 759
Norfolk: 746
Rockingham County: 657
Buckingham County: 553
Shenandoah County: 542
Frederick County: 460
Newport News: 447
Portsmouth: 419
Manassas Park: 414
Fauquier County: 409
Hanover County: 405

Globally, there are 8.97 million reported COVID-19 cases and 468,813 confirmed deaths as of June 22. The United States, which has the most confirmed cases and deaths worldwide, has seen 2.28 million confirmed cases so far, with 119,997 deaths nationwide attributed to the coronavirus since February.

Below is the latest data from VDH: