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German Citizen Sentenced to Nearly Two Years in Federal Prison for Defrauding U.S. State Department
Greenbelt, Maryland – In a shocking case of financial deception, Katrin Verclas, a 52-year-old native and citizen of Germany residing in Washington, D.C., has been sentenced to 728 days in federal prison for obstruction of a federal audit and for causing a financial institution to fail to file a suspicious activity report (SAR).
The sentence was handed down by U.S. District Judge George J. Hazel on [sentencing date] in the U.S. District Court for the District of Maryland. Verclas previously pleaded guilty to the charges, which were related to more than $1.2 million in U.S. State Department grant funds awarded to MobileActive, a corporation that Verclas controlled.
According to the plea agreement, Verclas, who was residing in Amherst, Massachusetts at the time, had worked for non-profit organizations in the field of social activism through the use of technology since about 1996. In preparation for a response to the DRL RFP, on January 15, 2010, Verclas converted a project known as MobileActive into a Delaware corporation, and on January 22, 2010, electronically submitted a grant proposal to DRL on behalf of MobileActive.
On September 20, 2010, MobileActive was awarded a grant from the U.S. Department of State in the amount of approximately $1,411,000. Between October 26, 2010 and July 26, 2012, Verclas submitted 11 payment requests on behalf of MobileActive, causing the U.S. Department of State to release $1.222 million to MobileActive’s business bank account, which Verclas controlled.
In order to request the grant funds, MobileActive, through Verclas, established an account with Payment Management System (“PMS”), a federal grants management database located in Bethesda, Maryland. However, Verclas failed to comply with a number of requirements under the grant, including providing documents and information to the State Department. Verclas admitted that she intentionally ignored the State Department’s repeated requests because she knew that she did not have the requisite reports, documents, and other items.
Additionally, Verclas admitted that from November 2010 to October 2012, she failed to disclose to the bank that many of the transactions involving the MobileActive business account were for Verclas’ own personal gain rather than legitimate business purposes. Verclas knew that, had the bank been aware of the true nature of these transactions, it would have been required to file a SAR. Through her deception, Verclas willfully caused the bank to fail to file a SAR.
As part of the settlement, MobileActive will pay $500,000 to the United States within five days of the Court accepting the consent judgment, or today’s sentencing, whichever is later.
Key Facts
- State: Maryland
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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