Burfoot Indicted After Lengthy Federal Investigation

By Leonard E. Colvin
Chief Reporter
New Journal and Guide

Norfolk City Treasurer and former Vice Mayor L. Anthony Burfoot remained on duty as a public elected official on Monday, January 11. Three days earlier, he was indicted by a federal grand jury on eight charges. Burfoot said Friday January 8, after his indictment, that he would not step aside from his job as City Treasurer, which has led to calls by some city officials and citizens for his resignation and/or recall.

Burfoot was arrested by federal officials on January 8 and escorted in handcuffs to a federal  district courtroom in downtown Norfolk.

During an appearance before a federal judge, prosecutors outlined  the charges lodged against  Burfoot,  including two charges of wire fraud, obtaining property under color of official right, perjury and criminal forfeiture.
Burfoot left the courthouse not having to post a bond at this point, as long as he surrenders his passport.
He will be formally arraigned  on  January 20.

Burfoot’s Attorney Andrew Sacks said his client was surprised at  the allegations in the 32-page indictment. However, rumors of an extensive FBI investigation into Burfoot’s activities had been circulating through the Black community’s rumor network for at least two years.

During Christmas week, news of  the feds formally indicting him sprang up on Facebook, but was quickly taken down.
Burfoot was first elected to political office in 2002 to represent Ward 3. The eight charges lodged against him by the government began in 2005 through 2011 while he was on council, Vice Mayor, and simultaneously,  Assistant City Treasurer. He was elected Treasurer in November 2013.

According to the indictment, the most extensive and damning charges stem from an  investigation into his dealings with and connection to Tivest Development and Construction, LLC, Tivest Holdings, LLC, and Tivest Development, LLC.

The  African-American-owned and operated company was run by the firm’s brothers, Dwight and Curtis Etheridge.
Also, Burfoot had dealings with a former Go-Go bar owner and developer who sought to get Burfoot to support  the opening of a gentleman’s club on Granby Street in downtown Norfolk, which never materialized.

Over time, in exchange for his effort to steer city contracts to Tivest and other deals, the feds charge that Burfoot managed to secure  some $475,000 in kickbacks and bribes.

“Black people work hard to elect people from our community to represent us in various levels of city government,” said one Black leader who asked that his name not be used for this article. “Part of their responsibility is supporting and promoting minorities who want to use the procurement system to build their companies … not to shake them down.

“In this case, although he did some good things for Ward 3 and the city,” said the leader, “he only enriched himself. This has set us back tremendously so far as trust and integrity from Blacks and from the greater community.”

Burfoot said he would not step aside, as suggested by  Norfolk Sheriff Bob McCabe, or  resign as members of the community leadership and media suggest.

In the beginning

The initial chapter of  Burfoot’s exploits began, according to the indictment, when he met with Tivest officials and became a “silent” partner in the company’s operation, in exchange for his efforts to secure city contracts for the firm. The indictment said Burfoot sought to keep secret his position  as “silent partner.”

Burfoot allegedly received cash, meals,  drinks, entertainment, and travel for  his efforts In the spring of 2005. Curtis Etheridge, according to the indictment, arranged for a company to install a heat pump system  in Burfoot’s home on Winthrop Avenue in Norfolk.

In May 2005,  Tivest paid the company $5,000.00 for this work.
Tivest later directed  funds to complete additional renovations to Burfoot’s home, such as installing hardwood floors and remodeling the kitchen and a bathroom in the same house.

But the Burfoot-Tivest connection  was almost unraveled, due an incident during the  same time. Curtis Etheridge was convicted in the Chesapeake Circuit Court of making a false police report following a confrontation at a local bar. Etheridge did not disclose the extent of then Council member Burfoot’s  involvement in the incident  and both denied media questions on the issue.

During the summer of 2005, Burfoot, the Etheridge brothers, and other Tivest officials, reportedly, held a meeting to discuss the councilman’s future with the company.
Although he had not invested any money in the company and up to that point, had steered  little revenue-producing  projects to the firm, Burfoot wanted to “cash out” of Tivest, and demanded $250,000 for his interest in the company, the indictment reads.

When one company  official at that meeting questioned his demands, Burfoot promised to use his position as a Norfolk City Councilman to steer city projects and other benefits to Tivest.  Burfoot  reportedly stated that “Tivest would not be awarded an upcoming development project, known as the Broad Creek Villas, unless his demand for $250,000 was met.”
The Etheridge brothers  caved-in and began paying $250,000 in  payments.

Always Cash Payments

Curtis Etheridge  paid Burfoot  at least $10,000 in cash in small increments, shortly after that meeting,  and then $30,000 in cash, according to the indictment.
There were other payments, at no more than $10,000 at a time – and always in cash.
Regular cash payments, reportedly,  were made at Burfoot’s  Winthrop Street home, his Treasurer’s Office and City Hall in secret and in exchange for favors.

The Norfolk Redevelopment and Housing Authority (NRHA)   acquired a $35 million grant from HUD to convert two public housing communities – Bowling Green and Roberts Village – into a new mixed-income community in Broad Creek which Burfoot represented on council.

Between March 2006 to December 2008, Dwight Etheridge reportedly paid the councilman  $100,000 for his help in funneling projects to Tivest at  the new development, arising from the grant.
In March  2006, NRHA issued a Request for Proposal  (“RFP”) for bidders in good standing to construct single family homes in Broad Creek.

Although  it was not in good standing at that time, Tivest submitted an RFP  on  March 16, 2006. Burfoot  promoted Tivest’s response to the RFP at a meeting  with NRHA representatives, and NRHA awarded Tivest eight lots over the objection of one NRHA employee, who refused to sign the award letter due to concerns of the Burfoot-Tivest connection.

In May 2006, NRHA issued another RFP to construct single family homes in Broad Creek. NRHA awarded Tivest 12 lots.
Seven months later NRHA issued a similar  RFP at the time Burfoot purchased Dwight Etheridge’s Mercedes sedan for $20,000, using a loan from NAE Federal Credit Union.

Burfoot reportedly instructed Etheridge to make payments on the automobile loan. As directed, Etheridge made direct payments to the loan and gave Burfoot  cash to do so, too.
Thereafter, NRHA awarded Tivest two lots on which to build multifamily buildings in Broad Creek.

In August  2007, NRHA issued another RFP to construct single family homes in Broad Creek and  awarded Tivest four lots.
In  April   2008, NRHA issued another RFP to construct townhomes and multifamily homes in Broad Creek and  NRHA awarded Tivest three parcels and two lots to do so.

◆◆◆

On an earlier occasion In November 2005,  the City of Norfolk had issued an RFP to construct a mixed-use  facility called the Broad Creek Villas. NRHA said the project was not economically viable and expressed concern that Burfoot   had pre-selected Tivest as the builder.
Burfoot then  suggested to NRHA that it transfer control of the project to the city.

The deadline for responding to the Broad Creek Villas RFP was 1 p.m. on December 5, 2005 and Tivest submitted its proposal and missed the deadline, causing it  to be rejected and awarded to a developer who did meet the deadline.
According to the indictment, Burfoot said he would assure Tivest would get the bid, and in March  2006,  a second RFP  for the development was issued. In July Tivest was awarded the project.

At various times throughout 2007, Burfoot  met and corresponded with city officials, NRHA representatives and Tivest representatives about the project.
In February 7, 2008, NRHA requested that the project  be transferred to the city.    Between April 2008 and into 2009, Burfoot voted for rezoning and construction plans for the development which favored Tivest, including an ordinance transferring the land to the City of Norfolk to enter into a Land Disposition and Development Contract   with Tivest for the Broad Creek Villas project.

One  ordinance permitted the City of Norfolk to convey the land for the project at a nominal cost to the firm, and to pay Tivest $200,000 for infrastructure improvements associated with the project.
In  2009, the closing occurred for the Broad Creek Villas project. The City of Norfolk conveyed the land to Tivest for approximately $10, and Tivest received via interstate wire an approximately $4.8 million loan to construct the Broad Creek Villas.

The indictment said  Burfoot  directed Tivest  to revise the development’s  plans to ensure that no headlights would shine into his home from traffic flow to the Villas.
Tivest then used  funding for the project    to pay for the expenses associated with moving the planned residential entrance and cash  payments to Burfoot.

Tivest Begins To Unravel

As the Broad Creek saga was  underway, in October  2008, Tivest  proposed building a six-story building,   called the MidTown Office Tower, on city-owned land  at  Virginia Beach Boulevard and Tidewater Drive.
The firm asked  the city to sell the land  for a nominal amount. Tivest said the cost would be $23 million, naming  the Southeastern Tidewater Opportunity Project ( “STOP Organization”) as the anchor tenant.
Burfoot, according to the indictment,  promised Tivest  he would secure the City Council votes to  grant Tivest its wishes and a performance grant.

Burfoot reportedly demanded payment for his help and from  October 2008 to February 2011, Tivest paid him  at least $50,000 in cash and other gifts  for his pledge.

Unable to secure financing   for construction of the  MidTown Office Tower, Tivest asked the city  for a lease agreement  approximately 60,000 square feet of office space in the building for twelve years.
On or about February 23, 2010, during a City Council  closed-door meeting to consider the  proposal, Burfoot lobbied in favor of  Tivest’s request.

Three days later Tivest hosted a groundbreaking ceremony for the MidTown Office Tower and Burfoot attended.  But the city still owned the land and Tivest had not secured financing.
Two weeks later, Burfoot  voted to approve an ordinance authorizing the City   to execute an amendment to the MidTown  project authorizing the City to enter into an agreement to lease approximately 60,000 square feet of office space   for the next twelve years, and  Tivest to purchase the land for $1.2 million. The ordinance passed.
But Tivest still could not acquire financing.

In December 10, 2010, after Tivest asked for more help, City Council  discussed  the request.
Part of the proposal  said if the  STOP Organization,  as the anchor tenant, should not be able to  perform its lease obligations, the city would  expand  its lease commitment by  65,000 square feet.
Burfoot  directed a City employee to prepare an ordinance amending the MidTown LDDC for the City Council to vote on by the following week.

On  February 8, 2011, the City Council held a closed door meeting to discuss the proposed second amendment.
Burfoot later reported that three council members were against the plan and they should be lobbied to change their  positions.
On or about February 12, 2011, the three opposing council members held a town hall meeting  allowing residents to voice their opinion on the issue.

At the same time, news  surfaced that Tivest  was $32,600 behind in city taxes.
Burfoot  warned Etheridge that Tivest’s delinquent taxes must be paid prior to the City Council vote on the proposal slated for February 15,  2011.

Burfoot was then the Assistant Treasurer and instructed an employee to prepare Tivest’s delinquent tax bills, totaling approximately $32,600, so that Dwight Etheridge could pay them on February 14,  2011.
On   February 14, 2011, Tivest delivered a check for $22,554.04 to partially satisfied its bill.
That same day, Dwight Etheridge  paid the balance using his  sister’s credit card.

On  February 15, 2011, Burfoot  voted to approve an ordinance authorizing the City of Norfolk to approve Tivest’s proposed changes to the plan Mid-town plan.
February  18, 2011, the City  pulled the plug on the project when it was confirmed that STOP could not fulfill its obligation.

Still more payments

In another example Dwight Etheridge withdrew $8,000 from an account he controlled at NAE Federal Credit Union. Three minutes later, at 4:55 p.m., using the same bank teller who processed the $8,000 withdrawal, Etheridge paid $1,000 on  Burfoot’s  car loan. In order to conceal its involvement, Dwight Etheridge forged Burfoot’s  signature for the payment.

In November 2008,  Burfoot  voted to approve an ordinance  to convey to Tivest a 4.5-acre site valued at $990,800 for no cost, and to pay Tivest $500,000 for infrastructure improvements associated with the project.  Tivest also  got a $490,000 performance-based grant.

In early 2009, Tivest  obtained a cashier’s check totaling $13,325.99  to pay for appliances  for Burfoot’s home and Burfoot did not pay the firm back.
In August 2009,  Tivest ordered upscale appliances  for the new home that Burfoot  was building for himself on NRHA land on Woodland Avenue in the Broad Creek neighborhood.

Failed Gentleman’s Club

Another deal cited in the indictment details Burfoot’s efforts to help developer Arney open a  Gentleman’s club in downtown Norfolk. Burfoot reportedly requested $25,000 from Arney so that the mother of two of his children could buy a condo  at a development he was working on.

Burfoot could not get his colleagues to go along with the deal and Arney confronted him about it and was told the  plan would take up the issue later, but did not.
But the mother of the children got the money and a condo.

Dwight Etheridge and Arney are among eight people involved  in the scandal involving the defunct Bank of Commonwealth. Etheridge is now serving four years for his role of siphoning money from the bank for projects including the Midtown deal.

Arney got 27 months and is now out of jail, after a plea deal.
It is not clear if other indictments connected with Burfoot are forthcoming.