A Hampton Roads developer was arrested and accused of defrauding both the state and federal government of $11 million.
George Hranowskyj was arrested Thursday morning and charged with 14 counts of conspiracy, wire fraud and unlawful monetary transactions.
The scheme, according to court document was to buy up old historic properties in need of major renovations, and then apply for federal and state historic rehabilitation tax credits.
Investigators say the fraud started back in 2006 when Hranowskyj and his associates bought up the James Madison Hotel on Granby Street in Downtown Norfolk and the Mercer Building on West Princess Anne in Ghent.
His company, based in the Wainwright building on Bute Street, hired accountants who prosecutors say inflated renovation amounts, fabricated documents, and lied on applications to make the tax credits bigger.
Court documents say Hranowskyj sold fraudulent tax credits to unsuspecting investors who needed to bring their own tax debt down while pocketing more than $8 million in exchange.
His plan unraveled, according to prosecutors, when some of those tax credits weren’t approved by the federal government.
The unsuspecting investors didn’t know that and still claimed the fraudulent credits on their tax returns.
Hranowskyj is charged with 14 counts of conspiracy, wire fraud and unlawful monetary transactions.
If he is convicted on all counts, Hranowskyj could spend up to 220 years in federal prison.