Houston Man Accused of Defrauding VFW

A Houston man has been charged with mail fraud, accused of using donations raised by a national veterans group for his own benefit, rather than for a project intended to help troops in Iraq.

Joe H. Nichols, 46, appeared in federal court Friday before U.S. Magistrate Judge Stephen Smith.

The Veterans of Foreign Wars of the United States raised $182,000 for the project, which was intended to give soldiers in remote parts of Iraq the ability to communicate with their families back home.

The U.S. Attorney's Office said Nichols agreed to serve as project manager, and his company, Prasolus Digital Technology & Logistics, was supposed to transport the communication equipment overseas. According to court documents, Nichols traveled in June 2007 to VFW national headquarters in Kansas City, where he told the organization's leaders that he needed an additional $100,000 to finish the project. The VFW mailed a check to Nichols for $100,000.

He sent emails to VFW representatives, purportedly updating them on his progress, documents show. One email read, "We have completed 95 percent of the state-side effort ... and are moving forward. We are working hard on finding an appropriate shipper."

Nichols never delivered the communication system to Iraq, the U.S. Attorney's office said. By May 2008, he no longer was in contact with anyone involved in the project.

The judge allowed Nichols to remain free on $50,000 bail as long as he surrenders his passport and travels only within the continental U.S.

If convicted, he could face a maximum penalty of 20 years in prison and a $250,000 fine.

Nichols' attorney, James Madison Ardoin, declined comment.

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