TRADE SECRETS THEFT: THE ALLEGED CROOKED PROSECUTORS OF ST MARYS STATES ATTORNEY RICHARD FRITZ

– Julie White fled to a federal job in West Virginia; Dan White was banned from criminal cases, but Fritz kept him on the payroll

INDICTMENTS LOOM FOR FRITZ PROSECUTORS

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SEASON THREE – Trade Secrets Saga for 2023

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By KEN ROSSIGNOL

THE CHESAPEAKE TODAY

News and Commentary

LEONARDTOWN, MD – The county seat of St. Mary’s County has its share of felonious barristers over the years, starting with the current States Attorney Richard Fritz. He entered a guilty plea in St. Mary’s Circuit Court to carnal knowledge of a minor child and was sentenced to 18 months in jail as part of a plea deal when he was in college.

Another Walled City lawyer who was the Town Attorney cleaned out about $150 thousand from the town treasury, went to prison, was disbarred and hired by a local banker who admired his talents with moving money around.

It’s an old adage that when a fish starts to rot, it starts at the head, as a way of saying that lousy leadership in an organization leads to failure. More corruption can be expected with Richard Fritz as States Attorney in St. Mary’s County and running for yet another term in office in 2022. 

However, Fritz has an opponent, Jaymi Sterling, who spent nine years as Deputy States Attorney until quitting due to discovering and making public financial improprieties. Sterling is married into a big St. Mary’s County family, has won many friends in her community involvement, and has raised campaign funds in small and significant amounts alike. Plus, her dad, Governor Larry Hogan, supports her too. His horsepower among Republican voter’s trumps Fritz any day as many of Fritz’s old Democratic Party good old boys can’t vote for him in the GOP primary.

He was beaten like a drum in the only other election in which Fritz faced a female opponent.

A cocky Richard Fritz was predicting when he would take the gavel and robe away from Circuit Court Judge Karen Abrams, and the voters had another idea. Abrams beat him badly in both the Democratic and Republican primaries, as judges have to run in both party primary elections.

Fritz, made famous in his ABC 20/20 interview with Chris Wallace when Wallace pressed him to explain how three young men had consensual sex with a 15-year old girl wasn’t a case of gang rape as the victim claims, said, “It happens all the time,” may find his ability to win votes of women to be difficult when running against a woman again. Most women don’t buy that crap Fritz peddles to his good old boy buddies.

Now Fritz has his principal Deputy States Attorney, Daniel White, unable to appear in nearly all criminal cases due to a variety of reasons, including the Sheriff’s Department moaning about its cases being conflicted with the Deputy States Attorney Daniel White having anything to do with them and a new investigation expected to lead to indictments.

A criminal complaint involving the actions of Daniel White in embezzling millions of dollars from a family firm was sent to Fritz for prosecution. Fritz deferred the prosecution to the Office of the State Prosecutor, which is now investigating the allegations.

The allegations in the federal civil litigation include those of conspiracy to commit fraud on the part of Deputy States Attorney Daniel White and the involvement of Assistant United States Attorney Julie White, during the time she was a prosecutor on Fritz’s staff for fourteen years before she departed for the federal post in West Virginia.

The allegations are criminal and could result in prison time for both should the Maryland State Prosecutor bring charges against them and end in convictions.

Subpoenas for production of documents and testimony from Julie White about any monies, benefits, and compensation she was paid as a fraudulent employee of Compass Marketing and possible paramour of Daniel White have been blocked by her pals in the Department of Justice in West Virginia.

Julie White was scheduled to appear for a virtual video deposition on February 24, 2021. The day prior, according to the Compass Complaint, “…at approximately 9:30 a.m. on February 24, 2021, the day of the deposition, counsel for Compass Marketing received an email from recently retained counsel for Ms. White, John H. Tinney, Jr., indicating Ms. White’s intent to file a motion to quash the subpoenas. During a subsequent telephone conversation before the scheduled start time of the deposition, Ms. White’s counsel unequivocally informed Compass Marketing’s counsel that Ms. White would not be appearing for her deposition. Moreover, on March 1, 2021, Virginia counsel for Compass Marketing contacted counsel for Ms. White in an attempt to resolve the matter without leave of the Court. Counsel’s correspondence advised that it would file a Motion to Compel in the event Ms. White failed to reschedule the deposition and produce responsive documents to Compass Marketing’s subpoenas. See Exhibit 4, March 1, 2021, email correspondence from Stephen Stern to John Tinney. To date, no responsive documents have been produced by Ms. White, no protective order has been sought, and no motion to quash has been filed.”

“Ms. White is a licensed attorney who is currently employed as an Assistant United States’ Attorney in Charleston, West Virginia. She has held this position since January 21, 2020. She was previously employed as an Assistant State’s Attorney by St. Mary’s County, Maryland, from 2006 to 2020. By virtue of her status as an officer of the Court, it can be presumed that she understands the meaning and significance of Compass Marketing’s subpoenas.”

SANCTIONS SOUGHT AGAINST JULIE WHITE

The Complaint asked the Kanawha County Circuit Court in West Virginia to sanction Julie White for failing to give her testimony: “Compounding her failure to appear for or object to her deposition is the fact that Ms. White, by virtue of her status as a licensed attorney, is acutely aware of the consequences of ignoring a lawfully issued subpoena. No protective order has been sought, and no reasons have been put forth excusing her appearance. Ms. White has knowingly and willfully ignored a court order. Sanctions for such conduct are entirely appropriate.” 

In the HBO TV series Big Love that ran from 2006 to 2011, the lead character in the Mormon drama, maintained homes next door to each other for his sister wives. Perhaps Julie White believes her close assignations with Daniel White make her legally not required to testify against him.

What was sought from Julie White?

The court action filed in West Virginia sought: All documents related to any funds paid to her from Compass Marketing or paid on her behalf, or for her children, including private school tuition for her children.

 The list of documents also asked for: “All documents that refer, reflect, or relate to any disclosure or other notification you made to the St. Mary’s County States Attorney’s Office regarding your employment or other business relationship with Compass Marketing.”

CRIMINAL ALLEGATIONS AGAINST COURT OFFICIALS OF ST. MARY’S PUT THEM AT THE PINNACLE OF ORGANIZED CRIME IN THE MOTHER COUNTY; COMPETES WITH THEIR BRETHREN FROM THEIR HOME COUNTY OF PRINCE GEORGE’S COUNTY

Specifically, criminal acts alleged in the Complaint filed in the United States District Court of Maryland on February 5, 2022, alleging that Deputy States Attorney Daniel White, along with his brother Judge Michael White allegedly committed:

• Fraud and conspiracy in the theft of trade secrets
• Embezzled millions of dollars
• Violated his fiduciary duty to his company as General Counsel
• Committed tax fraud by laundering money he stole through a refund scheme using the IRS as the mechanism for the theft of millions of dollars
• Maintained secret bank accounts for twelve years to facilitate the embezzlement of millions of dollars of funds of Compass Marketing to enrich themselves and family members
• Fraudulently purchased life insurance policies on John White and forged John White’s name to agree to be the insured party with monthly payments on the multimillion-dollar policies coming from the secret bank accounts.

            CREATIVE FRAUD USED IRS

The charges in the Compass Marketing complaint against Flywheel and Daniel White include the fantastic revelation that Daniel White and his brother Judge Michael White thought up an entirely new way to rip oFf Uncle Sam’s treasury by overpaying the tax withholding for Daniel White and Judge Michael White.

Sections #120 – 125 of the Complaint states that “Michael created the IRS Tax Check Scheme whereby he would issue additional electronic payroll payments to himself and various employees that he coded as “tax checks.” These payments were in addition to normal payroll payments but were very large, were designated as 100% tax withholding, and would go to the IRS and to the state of Maryland.

121. Michael exclusively controlled on whose behalf the IRS received additional payments, as well as the payment frequency and magnitude.

122. For example, in 2015, Michael processed $520,000 in 100% tax withholding payments to himself and $530,000 to Daniel.

123. In 2018, Michael processed $270,000 in 100% tax withholding payments to himself, and $230,000 to Daniel.

124. Daniel and Michael also used the IRS Tax Check Scheme to benefit their families. In 2017, Michael processed $20,000 in 100% tax withholding payments for Debra and another $20,000 for Kelly, although neither was ever employed by Compass.

125. As a result of the IRS Tax Check Scheme, Michael and Daniel knowingly funneled money through the IRS through payroll disbursements that far exceeded their normal federal payroll tax withholdings to obtain large refunds, thereby embezzling millions of dollars from Compass.

The personal expenses placed on Daniel White’s Compass American Express corporate credit card reached $950,000.00 between 2012 and 2017. The items included tuition for his three children at a private high school and vacations for Assistant States Attorney Julie White. The Amex card was also used to pay for a secret email account at the Switzerland-based Proton company. The Complaint asserts that Daniel White failed to reimburse Compass for any of the expenses he put on the corporate charge card.

Compass Discovers Michael and Daniel White are Connected to Miller, DiPaula, and Flywheel’s Trade Secret Theft

202. A Compass auditor on the internal investigation team discovered multiple checks issued from Daniel White’s personal account to Chip DiPaula. These checks were the start of a trail that led Compass to recently discovery that Michael and Daniel White are part of the conspiracy by DiPaula and Miller to found and operate Flywheel as a competitor of Compass’s using Compass’s stolen trade secrets and proprietary information and know how.

203. On October 14, 2015, more than 13 months after DiPaula resigned from Compass, Daniel had M&T Bank issue a cashier’s check for $10,000 to DiPaula, using Daniel’s personal funds.

204. On December 1, 2015, nearly 15 months after DiPaula and Miller resigned from Compass, Michael White secretly issued to Daniel White a check from Compass’s M&T bank account for $65,000. The memo portion of the check read “Final Payments to James DiPaula and Patrick Miller.”

205. Eight days later, on December 9, 2015, Daniel had M&T Bank issue another cashier’s check for $25,000 to DiPaula, using Daniel’s personal funds.

206. Compass did not owe any severance to DiPaula or Miller, either upon their voluntary resignations in September 2014, in October and December of 2015, or at any other time. In any event, the “severance payment scheme” was false, and any such purported payments to DiPaula and Miller, whether from Compass’s M&T Bank account or from Daniel White’s personal M&T Bank account, was in violation of Compass policies.

207. Upon information and belief, Daniel provided the funds set forth in paragraphs 202 through 206 to DiPaula and Miller to support their funding and operation of Flywheel.

208. Upon information and belief, Daniel and Michael knew and encouraged DiPaula and Miller’s theft of Compass trade secrets and wanted Flywheel to succeed to the detriment of Compass. Moreover, Daniel’s involvement with and interest in Flywheel created a conflict of interest for him while he was serving as General Counsel for Compass, which he failed to disclose to Compass in violation of his duties thereto.

Should these allegations prove to be accurate, and if the federal prosecutors and the IRS bring about convictions, Daniel White can be expected to be performing tax work as a jailhouse CPA and jailhouse lawyer in federal prison for white-collar crime. Judge Michael White may find little to do to while away his time as there is likely a shortage of orphans for him to minister as a recently defrocked Orphans Court Judge.

DECEITFUL IN DEALING WITH DEFENSE ATTORNEYS

Interviews with those who have had contact with Daniel White in legal circles point to a manner of dealing with defense attorneys that is condescending, untruthful, and evasive about providing those representing clients facing criminal charges with truth and facts about evidence. The local bar association won’t hold yard sales to raise money for Dan White’s legal defense fund.

GHOST EMPLOYEES

Assistant States Attorney Julie White was added as a ghost employee by Daniel White and Michael White, in or around 2015, according to the Complaint. Julie White’s acceptance of pay for which she did not earn gets her the dumbbell award and negates all the hard work she put in passing law school. If she is charged with the offense of conspiracy to theft, she is liable to switch from putting criminals into prison to being added to the Con-Air passenger jet to fly off to a federal prison for women. At the very least, she will be disbarred, though the bar is set low in Maryland for ethics and crime for attorneys. Julie White had to know she was getting a paycheck from a company where she did not work at the same time; the taxpayers of Maryland were paying her for prosecuting criminals.

ATTORNEY GRIEVANCE COMMISSION HAS DOMAIN OVER ILLEGAL ACTS BY ATTORNEYS REGARDLESS OF WHETHER CRIMINAL CHARGES ARE BROUGHT

What happens if it is determined, after Bar Counsel’s investigation, that an attorney violated the Rules of Professional Conduct?

If an attorney is found to have violated the Rules, one of the following dispositions may result, depending on the seriousness of the violation(s) and other factors:

• The attorney may be placed on inactive status;
• The attorney may enter into a Conditional Diversion Agreement; or
• The attorney may receive a letter of cautionary advice or letter of admonition from the AGC; or
• The attorney may receive a reprimand from the AGC or the Court of Appeals; or
• The attorney may be suspended from the practice of law; or
• The attorney may be disbarred.

CROOKED ST. MARY’S PART I: Fritz demoted prosecutor who uncovered financial scandal; now Deputy States Attorney Jaymi Sterling tells him to take his job and shove it.

CROOKED ST. MARY’S PART II: Was Project Graduation Money for Fritz’s Designated Female Staffer?

CROOKED ST. MARY’S PART III: Fritz’s Great Ocean City Adventure in Luxury Suite at $425 per Night; Thousands of Tax Dollars Spent for Canceled Conferences