William Grobes IV Pleads Guilty to $4.5M GI Bill Fraud

NORFOLK, Va. — William E. Grobes, IV, 45, of Chesapeake, Virginia, pleaded guilty today to conspiring to commit wire fraud and money laundering in a brazen $4.5 million scam that exploited the Post-9/11 GI Bill. The owner of the College of Beauty and Barber Culture (CBBC) orchestrated a years-long scheme to defraud the Department of Veterans Affairs by falsifying student enrollment and attendance records.

According to court documents filed with his plea agreement, Grobes represented CBBC as a fully accredited barber and cosmetology school eligible to receive tuition payments from the VA for veteran students. From October 2011 to September 2016, he submitted false claims indicating veterans were receiving full-time instruction. In reality, most students received little or no actual training. There were no exams, no practical exercises, and no curriculum to speak of—just sign-in sheets used to fabricate attendance.

The school, located in Chesapeake, operated as a shell operation where veterans were directed to show up, sign in, and leave. That was it. No instructors, no lesson plans, no oversight. Yet Grobes billed the VA for thousands of hours of non-existent instruction, pocketing more than $4.5 million in federal benefits meant to support those who served.

Grobes was charged by criminal information on November 16 and now faces a maximum penalty of 20 years in prison. Sentencing is scheduled for March 8, 2017, before U.S. Magistrate Judge Lawrence R. Leonard. While the statutory maximum is set by Congress, the actual sentence will be determined by the court, guided by the federal sentencing guidelines and other legal factors.

The case was jointly investigated by the U.S. Department of Veterans Affairs Office of Inspector General, the Naval Criminal Investigative Service (NCIS), and IRS-Criminal Investigation. Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, announced the plea along with Michael J. Missal, Andrew L. Traver, and Thomas Jankowski, leaders of the investigating agencies.

Assistant U.S. Attorney V. Kathleen Dougherty is prosecuting the case. Court records, including the statement of facts and plea agreement, are publicly available through the U.S. District Court for the Eastern District of Virginia and PACER under Case No. 2:16-cr-154. The fallout from Grobes’ scheme leaves a trail of wasted taxpayer dollars and betrayed veterans in its wake.