Couple Sentenced for Embezzling Film School they Launched for Wounded Veterans

The husband and wife stole federal funds from the foundation they founded to benefit wounded veterans.

A married couple was sentenced Thursday for embezzling federal funds from a film school they founded for wounded veterans, according to a release from the U.S. Attorney’s office.

Judith Paixao received a six months’ sentence in custody and six months’ in home confinement, said U.S. Attorney Laura Duffy. Her husband Kevin Lombard received half of her sentence with three month’s custody and three months’ home confinement, according to the release. They were also fined $150,000.

The U.S Attorney’s Office says the married couple started the Wounded Marine Careers Foundation with the apparent intention to provide job training, benefits and equipment for injured Marines returning from Iraq and Afghanistan.

Paixo and Lombard were directors of the foundation from 2007 to 2009. It was a tax-exempt foundation that aimed to prepare retired soldiers and injured veterans for a film career, according to Duffy. They used the film school to make numerous requests for money from the VA under false circumstances.

While they claimed to donate over $200,000 to launch the foundation, the media report says the couple ended up stealing more than $400,000 from the Foundation’s account in the course of a few years.

“These defendants capitalized on the misfortune of wounded marines in their time of vulnerability and took advantage of the VA’s commitment to serving wounded veterans to defraud the VA and enrich themselves,” said Duffy. “War profiteering which takes advantage of our veterans is not in any way, shape or form acceptable.”

Their offenses include transferring money from the foundation to their own personal bank accounts and credit cards. According to Duffy, the foundation’s funds were then used to pay for a breadth of personal expenses including a family trip to Bermuda, cell phone bills, car insurance, gifts for their family, prescription medications and counseling, a New Year’s sailing trip around the San Diego Bay, and wine and dinners for two.

At the court hearing, Judge Jeffrey T. Miller denied the couple’s request for a new trial or judgment of acquittal. Duffy says he followed this decision by observing, “…whatever commendable vision served to launch the Foundation, that idealism spawned theft, embezzlement and worse.”

He noted several pieces of evidence throughout the case known as “tells.” This included continual misrepresentations of fiscal donations, said the U.S. Attorney’s office. For example, the couple claimed to donate over a hundred thousand dollars to the Foundation from selling their house, when it was actually foreclosed.

Duffy says another tell was shown in how the couple billed Veterans Affairs for camera equipment purchased for the Foundation with an inflated price tag.

According to the media report, one of the witnesses, Lance Corporal Frey, was previously quoted in a positive review from the New York Times. When Frey testified at the trial he said that he was not provided with the level of equipment, training or job placement that he was originally promised.

When explaining why the couple received sentences below the advisory guidelines, Judge Miller noted their community support, low risk of recidivism and the court’s assessment that the couple had originally started the foundation with a well-intentioned vision, said the media report.

In the release, Douglas J. Carver, Special Agent in Charge of the VA OIG Western Region said, “It is our hope that the successful investigative and prosecutive efforts in this case will serve as a deterrent to others from engaging in criminal activity that cheats veterans and the VA programs designed to assist our nation’s heroes.”

Contact Us