Owner of Chesapeake Barber College Pleads Guilty to $4.5 Million GI Bill Fraud

NORFOLK, Va. – Katherine Grobes, 45, of Chesapeake, pleaded guilty today to a charge of conspiracy to commit wire fraud.

According to the statement of facts filed with the plea agreement, Grobes owns the College of Beauty and Barber Culture (CBBC), located in Chesapeake. CBBC was purportedly a barber and cosmetology school approved by the Department of Veterans Affairs to provide education and training to military veterans, including veterans who received tuition assistance under the Post-9/11 GI Bill. Grobes represented to the VA that CBBC provided full-time schooling to hundreds of veteran students beginning in October 2011. In reality, the school was a sham. Most veterans enrolled in CBBC courses received few, if any, hours of instruction from CBBC employees, and there were no tests, exams, or practical exercises given. Rather, students were directed to simply sign in and out of the school each day so that Grobes could report to the VA that they were enrolled and attending.  In exchange, CBBC received Post-9/11 GI Bill tuition payments for each veteran from the VA.  Based on Grobes’ provision of false information to the VA concerning the number of hours of instruction and the manner and quality of the instruction provided to veteran students, CBBC received over $4.5 million in Post-9/11 GI Bill tuition payments between October 2011 and September 2016. Grobes owns CBBC along with her husband, William Grobes, who pleaded guilty on November 30, to charges of conspiring to commit wire fraud and money laundering.

Grobes was charged by criminal information on December 2, and faces a maximum penalty of 5 years in prison when sentenced on March 10, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Michael J. Missal, Inspector General, U.S. Department of Veterans Affairs; Andrew L. Traver, Director of the Naval Criminal Investigative Service (NCIS); and Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after the plea was accepted by U.S. Magistrate Judge Douglas E. Miller. Assistant U.S. Attorney V. Kathleen Dougherty is prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-164.