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FBI agent testifies about ex-governor’s debts

By WTOP Staff

LARRY O’DELL
Associated Press

RICHMOND, Va. (AP) — Former Virginia Gov. Bob McDonnell and his wife, Maureen, were swamped with heavy credit card debt and money-losing real estate investments when they turned to a wealthy businessman for financial help, an FBI agent testified Wednesday.

Prosecutors in the McDonnells’ public corruption trial called agent David Hulser to the stand to bolster their claim that the defendants were in dire financial straits when they began doing favors for former Star Scientific CEO Jonnie Williams in exchange for more than $165,000 in gifts and secret loans.

The McDonnells are charged in a 14-count indictment with accepting the gifts and loans from Williams in exchange for helping him promote his company’s products, primarily Anatabloc.

Hulser testified that the McDonnells owed nearly $75,000 on credit cards when the governor was inaugurated in January 2010. The debt increased to more than $90,000 by September 2010 before falling to just over $31,000 in April 2011, after Maureen McDonnell used some money from an inheritance to pay down the debt.

Financial records obtained by Hulser also showed that Maureen McDonnell made several credit card payments in May 2011, including $9,900 to one card held by her husband, within a couple of days after receiving a $50,000 loan from Williams and an additional $15,000 to cover catering costs for a daughter’s wedding.

Hulser also analyzed financial records of two Virginia Beach rental properties owned by Bob McDonnell and his sister. Expenses exceeded rental income by about $43,000 in 2009 and $40,000 in 2010, he said.

Along with the financial records, Hulser presented detailed charts showing cellphone calls and text messages among the McDonnells and Williams around the time of meetings, free vacations, golf outings, a Manhattan shopping spree and other events that other witnesses have discussed since the trial began July 28.

Evidence also was introduced Wednesday showing that McDonnell revised a mortgage refinance application to disclose two loans from Williams three days after state police questioned his wife about the debts.

Nanette Bolt, a mortgage supervisor for Pentagon Federal Credit Union, testified that she was not surprised to see the undocumented loans totaling $120,000 added to McDonnell’s loan application on Feb. 18, 2013. She also said McDonnell never mentioned to her that his wife had just been interviewed by investigators who asked about loans from Williams.

The charges against the McDonnells include two counts of submitting fraudulent documents to financial institutions.

The McDonnells were seeking to refinance loans on four properties — their primary residence in suburban Richmond, a second home in the Blue Ridge Mountains and the two beach houses — with the credit union known informally as PenFed.

An initial application did not list the Williams loans as a liability, nor did it disclose ownership of Star Scientific stock that also was added to the revised application. Prosecutors say McDonnell tried to conceal the loans and the stock, disclosing them only after police started asking questions.

But the former governor’s attorney, John Brownlee, noted that McDonnell also added about $243,000 in assets — including an individual retirement account, a life insurance policy and a 2005 Toyota — when he submitted the revised application.

“Is it fair to say you were not surprised to see these edits?” Brownlee asked.

“Correct,” Bolt said.

She also testified that the Williams loans were not reflected in the credit union’s closing documents because McDonnell had indicated that no payments were due until 2015.

Virginia Beach Mayor William Sessoms, president of TowneBank’s parent company, also testified that McDonnell never mentioned the Williams loans in an application to refinance a loan with his institution.

Sessoms said loans to a spouse or to a corporation do not have to be listed on an individual borrower’s financial statement. However, in reply to a question from U.S. District Judge James Spencer, Sessoms acknowledged that bank officials need to know about any borrower’s shared debts.

Assistant U.S. Attorney Michael Dry said prosecutors expect to wrap up their case Thursday. If that happens, Spencer said the jury will be given the day off Friday and begin hearing from defense witnesses next week.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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