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Julia C. Dudley
Acting United States Attorney

Brian McGinn
Public Affairs Specialist
BB&T Building
310 1st Street, S.W., Room 906
Roanoke, Virginia 24011
(540) 857-2974
FAX (540) 857-2179

September 26, 2008


Acting United States Attorney Julia C. Dudley announced today that Francis Habo George, age 59, of Luray, Virginia, pled guilty today in the United States District Court for the Western District of Virginia in Harrisonburg to wire fraud and tax perjury charges.

George, a licensed medical doctor with a practice in a rural area of Luray, Virginia, waived his right to indictment and instead pled guilty to a two-count information charging him with one count of wire fraud and one count of tax perjury. Both charges relate to George’s misuse of federal grant funds issued by the United States Department of Health and Human Services, Health Resources and Services Administration.

“This office is committed to investigating and prosecuting all incidents in which individuals who have earned the public’s trust, such as medical doctors, take advantage of that trust and engage in criminal activity,” Acting United States Attorney Julia C. Dudley said today. “Mr. George took a Federal Grant intended to improve conditions for his patients and instead used taxpayer money to line his own pockets.”

According to evidence presented at today’s hearing by Assistant United States Attorney C. Patrick Hogeboom, III, George applied for, and received, a $393,000 grant from the United States Department of Health and Human Services, Health Resources and Services Administration in 2003. The grant was to be used specifically to renovate the building that housed George’s medical practice.

In order to obtain the money, George initiated payments through a computer program which caused a wire transfer from the Federal Reserve Bank in Richmond into his business account. The defendant received a total of $327,000 in grant funds, with a majority of those funds being used improperly. Today in court, George admitted that instead of paying for building upgrades at his practice, he used the grant funds to make his property mortgage payments, pay his son’s college room and board, make payments on a Discover credit card and pay for unrelated personal legal fees and other personal obligations.

Today in District Court George also admitted that he committed tax perjury in 2005 for calendar year 2004 by submitting a false tax return. According to the defendant, on his 2004 tax return, form 1040, page 1, line 22, he listed his total income in the amount of $11,484.50. However, George failed to report at least an additional total income of $150,000.

The maximum penalty faced by the defendant is 23 years imprisonment and/or a fine of $250,000.

The investigation of the case was conducted by the Department of Health and Human Services Office of the Inspector General, the Internal Revenue Service Criminal Investigations, the Federal Bureau of Investigation and the Luray, VA Police Department. Assistant United States Attorney C. Patrick Hogeboom, III is prosecuting the case for the United States.