HOUSTON (CN) – A Houston businessman pocketed $100,000 the Veterans of Foreign Wars gave his company to build a system for soldiers in Iraq to communicate with their families, federal prosecutors said.
Joe Nichols, 46, was charged with one count of mail fraud, the U.S. Attorney’s Office said in a statement.
“Nichols allegedly agreed to assist the VFW by having his company, Prasolus, serve as project manager to get the communication hardware and software to Iraq,” prosecutors said in the statement. “The Texas VFW raised approximately $182,000 for the communication project, from which Nichols submitted invoices for payment. “In June 2007, he allegedly traveled to the national headquarters of the VFW in Kansas City and induced the national VFW to give him an additional $100,000, which he said he needed to complete the communication project and deploy it to Iraq. “Although the national VFW mailed a check to Nichols for $100,000, the communication system was never delivered. Instead, he allegedly used funds from the $100,000 for his personal benefit.”
A federal magistrate judge set Nichols free on $50,000 bond, but he had to surrender his passport and promise not to flee the country.
If convicted, Nichols faces up to 20 years in federal prison and a $250,000 fine.