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Jamie Carl Graham pleaded guilty to mail fraud in events that contributed to the firm’s collapse.
The Roanoke Times | File 2011
Breakell’s project to renovate the Meridium building just off of Interstate 581 provided cover for a project manager to acquire supplies for himself and friends, prosecutors say.
Tuesday, April 9, 2013
A former project manager for Breakell Inc. has admitted to fraud and deceit that played a role in the demise of the prominent Roanoke construction company.
Jamie Carl Graham, 33, pleaded guilty to mail fraud during a hearing Tuesday in U.S. District Court in Roanoke.
Graham was charged with using his position of trust at Breakell to devise a scheme in which costs were shifted from one construction project to another, concealing the fact that he was using building materials billed to Breakell to remodel his own home and the homes of his friends.
Prosecutors say the scam involved up to $1 million in diverted funds.
At the center of the case was a Breakell project, overseen by Graham, to renovate a former warehouse in Roanoke that is now the headquarters for software business Meridium, Assistant U.S. Attorney Dan Bubar said in summarizing the evidence against Graham.
After exploiting Breakell’s internal coding system to add extra costs for the project, prosecutors say, Graham forged the names of Meridium officials on change orders authorizing the additional work.
In that case and others, Breakell wound up paying much of the expenses before they could be passed on the project owner, causing financial difficulties that forced the company to cease operations several months ago.
“I think it played a huge role,” Phillip Anderson, an attorney for Breakell Inc. in an unrelated civil case, said of the effect of the criminal case on Breakell’s closing.
Graham, who faces up to 20 years in prison, originally had been charged with 15 counts of mail fraud.
Although all but one of the charges were dismissed as part of a plea agreement, prosecutors will be allowed to cite the conduct covered by the entire indictment when Graham is sentenced in August.
A graduate of Virginia Tech with a degree in civil engineering, Graham has been held in the Roanoke City Jail since February.
Appearing in court wearing a green-and-white striped jail suit and handcuffs, Graham admitted guilt only to one of the 15 charges he had faced.
That charge involved wood flooring that was shipped to Avon, N.C., to be used for a friend’s beach house on the Outer Banks.
Because checks and other paperwork used to cover the expenses were sent by mail, Graham was charged with mail fraud.
Under the plea agreement, the exact amount of losses that Graham is responsible for — somewhere between $28,000 and $1 million — will be determined when he is sentenced.
As a project manager for Breakell, Graham’s duties included bidding for jobs, hiring subcontractors, supervising crews, ordering supplies and materials, and communicating with project owners on Breakell’s behalf.
Not long after Graham began working for Breakell in 2008, he found a way to abuse a coding system the company used to assign costs for each construction project, prosecutors say.
Graham would switch the costs of labor and materials from one project he was overseeing to another, with the actual benefits going to himself “or his friends and associates,” according to an indictment returned by a grand jury last October.
Among other allegations, Graham is accused of renovating his own home and a hair salon owned by his former domestic partner and billing the costs of labor and materials to Breakell construction projects he was overseeing at the time.
To conceal cost overruns caused by the miscoding, Graham would then forge change orders that resulted in Breakell paying for additional costs.
“As a result of the fraudulent acts of Jamie Carl Graham, Breakell received invoices for labor and materials that it was misled to believe were associated with certain specific projects,” the indictment stated.
More than $1 million of the charges were related to the renovations of the Meridium building, Bubar said in court Tuesday.
The Meridium project, which transformed a former warehouse into a state-of-the art office building that opened in 2011, was one of a number of high-profile projects that Breakell handled over the years.
The indictment raises the possibility that owners of the projects handled by Breakell might also have lost money to the fraud, but does not provide details.
A call to Meridium was not returned Tuesday.
Known for its green policies, Breakell had been in business for more than 50 years before it ceased operations late last year.
Shortly after Graham was charged in October, company chairman and CEO Stan Breakell said the fraud was “a real tragedy for Breakell, and it’s had a tremendous bearing on our financial situation.”
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