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Chesapeake Barber College Owner Pleads Guilty to $4.5 Million GI Bill Scam
NORFOLK, Va. – Katherine Grobes, 45, of Chesapeake, pleaded guilty today to a charge of conspiracy to commit wire fraud.
Grobes owns the College of Beauty and Barber Culture (CBBC), located in Chesapeake. According to the statement of facts filed with the plea agreement, CBBC was purportedly a barber and cosmetology school approved by the Department of Veterans Affairs to provide education and training to military veterans, including veterans who received tuition assistance under the Post-9/11 GI Bill.
In reality, the school was a sham. Most veterans enrolled in CBBC courses received few, if any, hours of instruction from CBBC employees, and there were no tests, exams, or practical exercises given. Rather, students were directed to simply sign in and out of the school each day so that Grobes could report to the VA that they were enrolled and attending.
In exchange, CBBC received Post-9/11 GI Bill tuition payments for each veteran from the VA. Based on Grobes’ provision of false information to the VA concerning the number of hours of instruction and the manner and quality of the instruction provided to veteran students, CBBC received over $4.5 million in Post-9/11 GI Bill tuition payments between October 2011 and September 2016.
Grobes owns CBBC along with her husband, William Grobes, who pleaded guilty on November 30, to charges of conspiring to commit wire fraud and money laundering.
Grobes was charged by criminal information on December 2, and faces a maximum penalty of 5 years in prison when sentenced on March 10, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
A joint investigation by the U.S. Attorney’s Office for the Eastern District of Virginia, the Department of Veterans Affairs Inspector General, the Naval Criminal Investigative Service, and the IRS-Criminal Investigation led to the guilty plea.
Assistant U.S. Attorney V. Kathleen Dougherty is prosecuting the case.
Key Facts
- State: Virginia
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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