Richmond business owners stole thousands of stimulus dollars, feds allege

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

Cephas Industries previously worked out of 2320 Deepwater Terminal Drive. (PHOTO: Michael Schwartz)

RICHMOND, Va. — A defunct Richmond company and two of its former executives are facing criminal charges for allegedly milking a federal stimulus program that was enacted in the wake of the recession.

Cephas Industries and its namesakes, Morris Cephas Sr. and Chiroya Cephas, were indicted by a federal grand jury in Richmond this month on allegations that they stole hundreds of thousands of dollars from the American Recovery and Reinvestment Act for their own personal means – rather than the money’s intended purpose of helping build a recycling facility and creating jobs on the Southside.

The indictment claims that the Cephases engaged in a scheme over a four-year period beginning in 2010 to defraud the U.S. Department of Energy and the Virginia Department of Mines, Minerals and Energy, which dispersed to their company around $500,000 from the Recovery Act. The intention of the grants was to stimulate the economy by providing incentives to diversify the state’s energy supply.

Press releases from the time touted the planned Cephas facility as a $3.5 million biomass recycling complex to be built in a 33,000-square-foot space on Formex Road. It was expected to create 50-75 jobs and be operational by spring 2011.

Dubbed the “Open-Loop Biomass Manufacturing Project,” the facility never materialized. The indictment charges that much of the money instead was ultimately pocketed by the Cephases and used to pay their personal bills, including delinquent taxes owed to the IRS.

Click here to continue reading on RichmondBizSense.