Veterans who testified in court against Davis said they felt “used,” "taken advantage of,” “deceived” and “bamboozled.”
Now, Davis has to fork over to the government $4.7 million in cash; numerous luxury vehicles, including a Lamborghini, a Ferrari, a Bentley, two Mercedes-Benzes, and a BMW; and real estate in Dallas and Utah worth more than $2.5 million, all of which he’d been able to get his hands on with cash he made through the school.
Federal prosecutors say he was able to obtain such riches through a Veterans Affairs tuition fraud scheme he started several years ago.
“This defendant attempted to argue that because the proceeds of his fraud were in his business account, rather than in a personal bank account, he should not have to give it all back," Acting U.S. Attorney Prerak Shah said in a press release. "But neither the American taxpayer nor the Court recognize such a distinction. We are proud to say that $72 million in fraudulently-obtained money is headed back into U.S. coffers.”
Davis was found guilty after a six-day trial in April. The courts ruled on the forfeiture on Sept. 2. He faces up to 180 years in federal prison and is to be sentenced on Sept. 22.
However, his lawyers say they plan to make an appeal.
“Frankly, I think the government just overreached and got it wrong, flat out,” Derek Ryan Staub, one of Davis’ attorneys, told the Observer. “This is one of the worst cases of overreaching I’ve ever seen in my life.”
Davis marketed a six-week HVAC training course for veterans that would be covered by the Veterans' Educational Assistance Act of 2008, also known as the post-9/11 GI Bill.
Prosecutors say Davis realized if he could get the VA to accept GI Bill payments for tuition at his career center, he could charge each student $18,000–$21,000 for the six-week course. For that, though, he would need approval from the Texas Workforce Commission (TWC) and the Texas Veterans Commission (TVC). The two commissions require applicants to show they’re not facing any criminal or civil actions, and that their schools are established educational institutions in stable conditions.
He knew he didn’t meet the requirements, so Davis lied and concealed information from the two commissions, authorities say. He was facing civil judgements over unpaid debts and had a pending felony charge for theft of services when he applied to the TWC and TVC. But Davis told them otherwise.
On top of that, Retail Ready was only a few months old when Davis applied, but he told the commissions it operated as a school for two years, prosecutors claim. He said he was ready to take on students, but he didn’t have a building or basic supplies.
After he allegedly submitted false financial statements, the two commissions approved Davis’ applications for funds from the post-9/11 GI Bill.
Davis kept an electronic journal that became a key piece of evidence at trial. One of the journal entries reads: “Several decisions lie ahead that will ultimately make the difference if I succeed or if I fail. More gut-wrenching conversations, more humiliating experiences, more lying is in order.”
In court, William Chamblee, another one of Davis’ attorneys, didn’t deny that his client lied and didn’t divulge his pending criminal charge when applying to the TWC and TVC.
“Those things are wrong,” Chamblee said. “And again, I have no excuse that I would give you for those.”
But Chamblee argued that the burden was on prosecutors to prove Davis devised a scheme, not that he’s imperfect or that “he’s a man that maybe you, in some ways, would not want to emulate.”
The journal presented in court showed that Davis had lied. But Chamblee said it also showed “a sad man, a fractured man, a depressed man, a man who doesn’t understand and love because he’s felt unloved his entire life.”
“I am tired of not doing what it is I am trying to obtain — teaching veterans and young people a trade that they can build a life upon,” Davis wrote in one entry.
In another, Davis wrote, "I know that I’m on the right path with this school. And I know it will act as a new education model and a new sense of possibility in all areas of education.”
Chamblee said all of the students who spoke out against Davis knew the tuition cost and that it would come out of their GI Bill funds. He also said those students passed the federal exam for their HVAC certification.
From 2014 to 2017, the career center, which was operating as a non-college degree trade school, served around 3,000 people, some veterans, some not. The school had one of the highest completion rates among others like it.
Davis had been in the HVAC world since around 2005. He was often hired by corporations to train their employees on how to operate HVAC equipment. He didn’t have a school at the time. He did this through an outfit called Jon Davis Companies. But he wanted to start a school to train people, so between 2011 and 2014, he was working on securing the two commissions' approval.
"Frankly, I think the government just overreached and got it wrong, flat out.” – Derek Ryan Staub, attorney
In that time, he wrote a $25,000 check to the DoubleTree Hotel in Irving that bounced. He got arrested for that and didn’t divulge this to the TWC.
“It was not a scheme to defraud the federal government,” Chamblee said. “That is not why he didn't divulge it. He wasn't trying to defraud anyone.”
Davis thought he could pay restitution for the bounced check and that this wouldn’t affect his approval with the TWC. It ultimately did get dismissed after the TWC’s approval.
Meanwhile, he lied about the financial statements because a full financial review and evaluation of all his records would cost more than he could afford. But the financial statements he provided to TWC showed the same thing that the full evaluation would have shown, that he didn’t have any money. His attorneys say he wasn’t trying to make it seem like he had more money than he did.
Chamblee said, “They take these missteps that are all wrong by this gentleman, and they just, because of that, take an extra step further to say, he attempted to defraud the federal government, so we will take away his liberty, on a school that was one of the most successful trade schools in the state between '14 and '17.”
Davis has maintained his innocence from the beginning, and his attorneys plan to keep fighting the charges in court.
“The government has too much power, and this case proves it,” Staub said. “I think the Fifth Circuit will overturn these harsh decisions.”