NORFOLK, Va. — Katherine Grobes, 45, of Chesapeake, Virginia, pleaded guilty today to conspiracy to commit wire fraud in a brazen $4.5 million scheme that exploited the Post-9/11 GI Bill, defrauding the Department of Veterans Affairs and betraying the trust of military veterans seeking education.
Grobes owns the College of Beauty and Barber Culture (CBBC), a so-called barber and cosmetology school in Chesapeake that was approved by the VA to train veterans. From October 2011 to September 2016, she falsely claimed the school provided full-time instruction to hundreds of veterans. In reality, CBBC was a shell operation where students were told only to sign in and out each day—receiving little to no actual training, no tests, no exams, and no hands-on instruction.
Despite the lack of any legitimate educational programming, Grobes submitted false records to the VA, reporting inflated hours and fabricated attendance. These lies triggered tuition payments from the federal government under the Post-9/11 GI Bill. Over five years, CBBC pocketed more than $4.5 million in taxpayer-funded benefits meant to support veterans’ futures—all while delivering nothing in return.
Grobes operated the scam with her husband, William Grobes, who pleaded guilty on November 30 to charges of conspiracy to commit wire fraud and money laundering. The couple weaponized the VA’s approval system, turning a government benefit program into a cash pipeline built on deception and greed.
Charged by criminal information on December 2, Katherine Grobes now faces a maximum penalty of 5 years in federal prison. Her sentencing is scheduled for March 10, 2017, before U.S. Magistrate Judge Douglas E. Miller. While Congress sets the maximum penalty, the actual sentence will be determined by the court, weighing advisory Sentencing Guidelines and other legal factors.
The case was announced by Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, alongside Michael J. Missal, Inspector General of the U.S. Department of Veterans Affairs; Andrew L. Traver, Director of the Naval Criminal Investigative Service (NCIS); and Thomas Holloman, Acting Special Agent in Charge of IRS-Criminal Investigation. Assistant U.S. Attorney V. Kathleen Dougherty is prosecuting the case. Court records are available under Case No. 2:16-cr-164 in the Eastern District of Virginia.
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Key Facts
- State: Virginia
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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