Wednesday, November 13, 2002

Papers: Burrow misled lawmaker

Former Vinton Del. Richard Cranwell didn't know that state money was being used as collateral for a loan, according to court documents.

By JEN McCAFFERY
THE ROANOKE TIMES

   Richard Burrow, former director of the National D-Day Memorial Foundation, deceived a key state legislator in connection with the state's appropriation of $4.2 million in matching funds to finance the Bedford monument, according to federal court documents.

    Former Vinton Del. Richard Cranwell, who served as co-chairman of the House Finance Committee, is the latest person to emerge in the case against Burrow. Burrow, 55, faces four federal fraud charges in connection with the memorial's financing .

    Cranwell will likely testify as part of Burrow's trial, which begins in December. Burrow's attorney, John Lichtenstein of Roanoke, said after a court hearing Tuesday that he would question "anybody and everybody" about the case. U.S. Attorney John Brownlee declined to comment on whether the prosecution would seek out Cranwell's testimony.

    Federal prosecutors Pat Hogeboom and Morgan Scott have argued that Burrow's alleged scheme began when the General Assembly appropriated $4.2 million to the D-Day foundation in 2000. Before the foundation could receive the funds, however, it had to match the money with private funds .

    Burrow went to National Cooperative Bank in California to secure a $3.3 million short-term loan.

    The bank was concerned about the plan, according to federal prosecutors, and asked for more explanation. Burrow deceived the foundation's attorney about the matching funds, federal prosecutors have argued.

    Then Burrow asked NCB to contact Cranwell to guarantee that the General Assembly would release the $4.2 million to the foundation. The bank contacted Cranwell, and he provided the assurance that the funds would be made available.

    "Like the foundation, the chairman [Cranwell] was unaware that the collateral for the loan was state money," Hogeboom argued in court documents. Burrow "never informed the chairman that there was no cash and no matching funds. Once again, the defendant used deception, omissions, and falsehoods to obtain taxpayers' money."

    According to financial documents from July of 2000 filed in federal court, Cranwell said that "the money will not be held back for any reason." He said that the loan met the remaining requirements to fulfill the matching funds criteria and that the $4.2 million grant would be paid within eight weeks of confirmation of the matching share requirements.

    Cranwell said that he would outline these details in a letter to NCB before the funds were dispersed, according to the financial documents. It is unclear whether Cranwell, who did not return calls for comment, actually sent that letter.

    Federal authorities have alleged Burrow fraudulently drummed up millions from the commonwealth of Virginia and a bank to build the $25 million monument. Burrow resigned shortly after the memorial opened in June 2001. A few months after Burrow's resignation, it was revealed that the foundation was $5 million in debt. The foundation filed for Chapter 11 bankruptcy last week.

    Lichtenstein has argued that Burrow's actions were not illegal and has asked Senior U.S. District Judge James Turk to dismiss three of the four fraud charges against Burrow. Turk said he would rule shortly.

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