Former VDH employee accused of stealing over $4 million from health department

RICHMOND, Va. (WRIC) — A former employee of the Virginia Department of Health (VDH) has been hit with multiple charges in connection to the alleged embezzlement of over $4 million from the state health department.

According to court documents obtained by 8News, Adam Lamarr Harrell of Chesterfield County has been charged with mail fraud, federal program theft and evasion of tax assessment.

All three of these charges stem from allegations that Harrell misappropriated millions of dollars in state funding through multiple means, including the creation of a shell company. In total, Harrell is accused of stealing over $4 million through these means.

According to court documents, Harrell used these funds for “the purchase of real
estate properties, luxury vehicles, dozens of firearms and jewelry.”

Additionally, Harrell is said to have avoided paying the IRS just under $1.9 million through incorrectly filing his taxes.

Harrell began his career with the VDH in the fall of 2013. According to court documents, he held many positions within this agency, including the one in which he allegedly committed these crimes — the associate director of the Virginia Office of Emergency Medical Services (OEMS).

As OEMS’ associate director, Harrell’s responsibilities included “managing Virginia’s emergency response programs, epidemiology research and the information technology systems that Virginia’s emergency medical services providers rely on.”

Harrel’s alleged embezzlement scheme

According to court documents, in November 2020, Harrell is said to have registered “Strategic Tech Innovations, LLC” as a Virginia limited liability company, listing himself as its organizer and registered agent. He also used his residential address in the Midlothian area of Chesterfield as the company’s office address.

Harrell reportedly then proposed that a vendor to OEMS begin using Strategic Tech as a subcontractor for “certain services and/or items” that OEMS could pay it to provide — though court documents state these products were not something OEMS needed or had told Harrell to request.

According to court documents, Harrell did not inform the vendor of his affiliation to Strategic Tech, nor did he inform OEMS of the proposal at all.

“By doing so, Harrell ensured that neither [the vendor] nor OEMS were aware that Harrell had a conflict of interest and had proposed a transaction that financially benefited himself,” court documents state.

According to court documents, Harrell continued to conceal his relationship to Strategic Tech and fraudulently represent it as the first bills for its services were discussed.

This included providing contact information for a fictitious Strategic Tech employee and lying about the company’s age when an employee of the vendor questioned why they couldn’t find information about Strategic Tech online. He is said to have told the employee the company was about a year old.

“In truth and fact, as Harrell then and there knew, this was a false statement, as Harrell had only created Strategic Tech days before,” court documents state.

Ultimately, the first invoice was accepted and nearly $200,000 was paid to Strategic Tech. According to court documents, Harrell used this money for his own expenses.

In total, Harrell is accused of creating 16 fraudulent invoices between this first exchange and May 2023.

“Harrell knew when drafting these invoices that his alter ego company, Strategic Tech, would not actually be providing the vast majority of the proposed goods or services to OEMS,” court documents state. “When drafting these invoices, Harrell set exorbitant and non-market prices for the various line items on the invoice.”

Additionally, Harrell continued to submit conflict of interest disclosure agreements — made public on the Virginia Conflict of Interest and Ethics Advisory Council’s websites — that did not disclose his relationship to Strategic Tech or the funds he was generating from this owned business.

Accusations of mail fraud

According to court documents, Harrell reportedly intentionally circumvented OEMS’ vendor requirements to ensure these invoices were paid by instead sending them to the Western Virginia EMS Council (WVEMS), who could authorize them without using the typical OEMS accounts payable processes.

WVEMS was instructed to mail these checks directly to Strategic Tech’s supposed address — however, that address was instead that of a rented UPS Store mailbox belonging to Harrell, according to court documents.

It is by these means that Harrell allegedly engaged in mail fraud. According to court documents, in January 2021, Harrell is said to have emailed WVEMS about a fraudulent Strategic Tech invoice totaling $831,309.99.

He also reportedly emailed a prepaid FedEx shipping label for this large check. According to court documents, the label instructed that the check be delivered to his home address, which it successfully was.

Alleged tax fraud, evasion of federal income tax assessment

According to court documents, Harrell filed a federal joint income tax return with his spouse for 2020. In this form, he reported being the sole owner of Strategic Tech and reported just under $200,000 in gross receipts.

Harrell is accused of reporting an amount slightly higher than that as Strategic Tech’s expenses, resulting in a net loss of just over $7,000.

“Harrell fraudulently lowered his taxable income, which generated a refund of approximately $934 when in reality he owed additional taxes to the IRS,” court documents state.

For the tax years 2021, 2022 and 2023, Harrell reportedly did not report any income for Strategic Tech at all. According to court documents, he listed only his OEMS salary and his spouse’s salary, resulting in large tax refunds, such as a $17,513 refund in 2021.

Court documents allege that Harrell would have owed the IRS nearly $1 million in 2021 if he had reported his Strategic Tech income. In total, across all three years, he reportedly failed to include this income and failed to pay the IRS an owed amount just under $1.9 million.

Harrell is currently scheduled to appear in court on July 18 at 2:15 p.m. for an initial, bond and plea hearing.

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