Former Newport News investment broker back in prison after failing to answer phone one night on home confinement

For more than a year on home confinement, Jeffrey A. Martinovich has taken daily calls from a Newport News halfway house to prove he was actually at his house.

But one night in late May, the halfway house couldn’t reach him: The former Newport News investment broker didn’t answer the phone at his Norfolk home, saying later that he didn’t hear the calls.

The Federal Bureau of Prisons has deemed that an “escape” from Martinovich’s home detention in a 2013 federal financial fraud case. They took him into custody the next day to serve the rest of his sentence — another four years — in prison.

The 55-year-old Martinovich — who has a daughter on the way in September with his fiancée — has filed a petition for a writ of habeas corpus, asserting that he’s being wrongfully imprisoned. His attorney, Trey Kelleter, is asking a federal judge to “immediately reverse” the prison system’s decision.

The petition says the Bureau of Prisons’ own evidence — GPS signals from the electronic monitor Martinovich was wearing on his ankle — shows he was at home in Norfolk’s Ghent section at the time, and that no one tampered with the ankle monitor.

“He was at home, as required, the entire night,” Kelleter wrote. It’s wrong, he contends, for the Bureau of Prisons to term a one-time failure to answer phone calls an “escape” — then punish him for that violation.

“You’ve got murder, you’ve got escape, and then somewhere down at the bottom you have that you didn’t answer your phone calls,” Kelleter said.

“If he committed that infraction, then we’ll deal with that,” the attorney added. “But it’s not an escape, and they know it ... He shouldn’t be going back to prison for not answering his phone for one night, when they know he was at home the whole time.”

The Bureau of Prisons has not filed a response to Martinovich’s petition, and a spokeswoman declined Tuesday to speak about the case, citing the pending petition.

Martinovich — the former CEO of MICG Investment Management in Newport News — was convicted at a month-long trial in 2013 of 17 of the 25 financial fraud counts he faced.

Among other things, jurors found that he had schemed behind the scenes to artificially inflate the appraisal of a company held by one of his hedge funds as a way of boosting the performance fees that he and the company garnered.

He later pleaded guilty to using investors’ money to pay for his trial lawyer, and was sentenced to 13 years and eight months behind bars on the 18 charges.

Martinovich spent most of that time locked up at Federal Correctional Institution Beckley, a minimum security prison in West Virginia, with the petition saying he “incurred no negative incident reports and received the lowest possible risk score.”

With standard good behavior credits, his release date was listed as August of 2025.

Then he was released last year because of the pandemic. Looking to reduce the spread of the disease among federal inmates, the Bureau of Prisons released thousands of “low risk” inmates nationwide.

Martinovich was among them: He was released in May 2020 “to serve the remainder of his sentence on home confinement.”

Martinovich began living with his fiancée last summer in Norfolk. The rules allowed him to go to work, but otherwise stay at the house — with a requirement that he answer his landline phone at random times each day.

“Petitioner had an unblemished record on home confinement for over a year,” the petition says.

Martinovich “excelled in home monitoring,” Kelleter wrote, adding that his client “complied with every required phone check, home inspection, and work inspection, and always provided proper documentation whenever required.”

He was working as vice president of strategy for the “55 Group,” a defense contractor, and “eagerly awaits the birth of his daughter” in September, the petition added.

“I had no motive to escape,” Martinovich wrote in a statement attached to the petition. “The BOP gave me a great opportunity with home confinement, and I have made the most of it.”

But on the evening of May 31, he didn’t answer calls from the halfway house beginning at 7:52 p.m.

Staffers first called his landline, but Martinovich says he didn’t hear it, perhaps because of a glitch with his phone service.. The halfway house tried to reach him on his cell phone, then his fiancée’s cell phone, to no avail.

“We did not return the calls because we were not aware of them, not because we were trying to avoid contact,” Martinovich wrote in the statement.

The halfway house, part of the Bureau of Prisons, then tried three times to activate a vibration mechanism on his ankle bracelet just before 8 p.m., but that system apparently wasn’t working properly.

A halfway house employee called the Norfolk Police Department at 10:48 p.m. asking them to go to the house on Botetourt Street to check on Martinovich’s whereabouts.

The employee told Norfolk police dispatchers that “his ankle monitor is showing that he’s at home, but he’s not answering phones or nothing.”

But when the officers got to the home at 11:22 p.m., they “mistakenly believed they were coming to a halfway house, not a private residence,” the petition says.

Police body camera footage obtained by Martinovich’s lawyers shows the officers knocking “very lightly” on the front door and peering through the door window. But they didn’t ring the doorbell or make other noises “to try to get the home occupants’ attention.”

“Dude who runs it (the halfway house) is probably asleep,” the petition quotes one of the Norfolk officers telling the other before they “quietly walked away.”

Meanwhile, Martinovich “was asleep in his second-floor bedroom” at the time, writing later that no one on the second floor could have heard the “faint taps” at the door.

At 1:43 a.m., Martinovich’s fiancée, Ashleigh Amburn, saw her cell phone and “realized they had missed the monitoring phone calls,” and woke him up, the petition says. “He immediately called the halfway house to check in and reported there in the morning,” it adds.

The next day, the petition said, a halfway house staffer “confirmed” that the GPS system on Martinovich’s ankle monitor “showed that he was in his house all night.”

The petition said the halfway house also determined that the ankle monitor had not been tampered with, but that the “vibrate function” on the device wasn’t working.

“Despite this irrefutable evidence that Petitioner was home that night, halfway house staff found that he had “Escaped,” the highest level of infraction,” the petition says.

The petition says the Newport News halfway house recommended that Martinovich stay on home confinement rather than go back to federal prison. But their recommendation was overruled by the Bureau of Prisons.

Kelleter wrote that the BOP “arbitrarily ignored” its own GPS evidence — and “arbitrarily and pretextually” labeled Martinovich’s “first ever failure to return a monitoring phone call as an excuse to reincarcerate him.”

“This fits an emerging BOP pattern of using pretextual excuses to reincarcerate inmates who have been released to home confinement during the pandemic,” Kelletter added.

The petition also maintains that the Bureau of Prisons failed to give Martinovich a chance to provide evidence on his own behalf, in violation of the agency’s rules.

The case is assigned to U.S. District Judge Roderick Young in Norfolk.

In the meantime, Martinovich is being held at a federal-affiliated jail in Oklahoma awaiting transit to the West Virginia prison, and will now likely miss his daughter’s birth in September. His projected release date is Aug. 10, 2025.

Peter Dujardin, 757-247-4749, pdujardin@dailypress.com