Charges Against Cowles Dropped

U.S. Court Clears Local Executive

Charges have been dropped against Northern Virginia businessman Frank L. Cowles Jr., who was arrested in November on allegations of conspiring to defraud a hedge fund out of $25 million.

A U.S. District Court judge in Chicago dropped criminal charges against Cowles on March 1 after the U.S. attorney's office there filed a motion to dismiss. Cases continue against two men who were charged with Cowles for allegedly defrauding a Chicago-based fund.

From his horse farm in Scottsville, Va., Cowles, an attorney and former board chairman of Arlington-based Virginia Commerce Bank, said he was "ebullient" that the charges were dismissed.

"For someone who has been absolutely clean and honorable all my life, the charges came as quite a blow," Cowles, 76, said in a telephone interview.

"The only thing I've ever had on my record is three speeding tickets when I was 18," he said. "After a very, very exhaustive 3 1/2 -month investigation, they came up with the right conclusion."

Cowles's attorney, Robert D. Luskin of the law firm Patton Boggs in the District, said the complaint against Cowles was a mistake and that his client had been the victim of a scheme that cost him a great financial loss.

"This was a mistake," Luskin said. "The person that was thought to be the predator was actually the prey."

The two men still facing prosecution in the case are accused by prosecutors of wire fraud. Richard E. Warren of Fredericksburg, who has pleaded not guilty, was indicted and detained. A complaint against David L. Myatt of Los Banos, Calif., is pending.

Cowles said he lost "millions of dollars" from his dealings with Warren.

After his arrest, Cowles resigned as a director of Virginia Commerce Bank. He owns two car dealerships in Woodbridge and raises Brangus cattle and Arabian horses on his Scottsville farm. The decision to drop charges against him was reported yesterday by the Washington Business Journal.