By JAY CONLEY
THE ROANOKE TIMES

Archives Reprint

The former bookkeeper of the National D-Day Memorial Foundation said Tuesday she drew the ire of former foundation president Richard Burrow when she questioned the legitimacy of $2.4 million in undocumented pledges put on the books last year by Burrow and another foundation official.

Federal prosecutors say one of those pledges - $2 million supposedly to be donated by Richmond philanthropist E.C. Robins - was listed by Burrow as collateral in connection with fraudulently obtaining one bank loan and attempts to obtain millions of dollars in other funds for the foundation.

The testimony from Holly Ervin came during the second day of Burrow's federal criminal trial on charges that he committed wire fraud, mail fraud, bank fraud and loan application fraud in connection with his fund-raising activities related to building the $25 million memorial in Bedford.

Burrow, 55, has pleaded not guilty to all the charges. The foundation, which is $3.8 million in debt, filed for Chapter 11 bankruptcy protection in October. His attorneys say he is being used as a scapegoat for the foundation's financial troubles.

Ervin was responsible for maintaining the foundation's donor pledge list and paying the foundation's operating and construction expenses. She created the computer file that contained a master list of donors and pledges.

She testified that on April 30, 2001, Burrow and foundation fund-raising director Jim Johnson told her to list several pledges on the foundation's pledge list. Normally, Ervin said she would receive a pledge card with information regarding when and how a pledge would be paid.

But Ervin said no such paper trail existed for $2.4 million in pledges presented to her that day by Burrow and Johnson.

When she inquired about the lack of documentation, Burrow told her that she didn't need to know the details of the pledges and that she should just do her job, Ervin testified.

"I made several objections but I was told to do it," Ervin said.

A few months later, on June 27, 2001, Ervin notified Burrow that she had deleted the Robins pledge and a few other smaller pledges from the donor list as part of the fiscal year-end audit.

"I did not think that they were valid pledges," she testified.

Prosecutors say Burrow then made up his own donor list that included the Robins pledge.

Robins testified Monday that he never agreed to make such a pledge. He eventually donated a little more than $800,000 to the memorial last year, but most of it was after Burrow resigned in July.

Prosecutors used Ervin's testimony to back up their allegations that Burrow used the false donor list to secure a $1.2 million loan from the Bank of the James in June 2001.

Prior to securing that loan, Burrow unsuccessfully tried to use the Robins pledge to obtain a $2.4 million loan from National Cooperative Bank in California. The bank would not make the loan to the foundation because Burrow was unable to give them written documentation of Robbins' pledge, a bank loan officer testified.

Also testifying Tuesday was former state delegate Richard Cranwell. He told the court that at the foundation's request he helped persuade National Cooperative Bank to lend the D-Day foundation $3.3 million in 2000. Burrow wanted to use the loan as matching funds for a like amount of money from the Virginia General Assembly.

Dionne Kilian, a bank loan officer, testified that she was concerned that using the 30-day loan as matching funds might be improper. But Kilian testified Cranwell assured her the loan met the requirements for matching funds.

"Talking with Mr. Cranwell was absolutely one of the factors in doing this loan," Kilian testified.

Cranwell, however, testified that he did not vouch for the loan. Rather, he merely said the state had vague standards of what funds met matching-fund status.

"I told them that the state could be loosey-goosey about what it considered a match," Cranwell testified.

Both Cranwell and Kilian testified that he refused to put in writing that the loan would be an appropriate match. Instead, Cranwell referred the bank to the House Appropriation Committee and the D-Day foundation's attorney for a legal opinion.

Assistant U. S. Attorney Pat Hogeboom has alleged that Burrow committed fraud by convincing the bank and the foundation's attorney that the loan was proper.

Burrow's attorney, John Lichtenstein, disagreed, noting that Burrow had obtained a previous loan from the same bank in 1999 in exactly the same manner.

"He [Burrow] never tried to hide what he was doing," Lichtenstein said. "He had done it before and it was his understanding that it was acceptable."

Hogeboom also maintained that the loan was improper because Burrow used the state's matching funds as collateral for the short-term loan.

The state's own guidelines toward what constitutes matching funds are vague enough that the presiding judge in the trial, senior U.S. Judge James Turk, described the language as ambiguous.

Even Ron Tillett, the state's former secretary of finance, stopped short of testifying that Burrow's actions were illegal. He was called as a prosecution witness.

Tillett testified that while a loan obtained to qualify for matching funds was not necessarily improper, a short-term loan in which the funds would not be available for any real length of time would have raised a "red flag" to state finance officers who presided over the matching funds program.

The trial is expected to run through Friday.

Jay Conley can be reached

at 981-3114

or jay.conley@roanoke.com.

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