A former D.C. government employee was arrested this week over allegations that she embezzled money from a city program designed to help formerly incarcerated residents and others struggling with employment, the Justice Department said Tuesday. She is accused of causing more than $300,000 in losses by embezzling funds from the program — which helped her find work after she was previously sentenced to more than two years in prison for stealing federal funds while working for a Maryland school district.
The Washington Post reported in 2018 that the city’s inspector general had launched an investigation into Rhayda Barnes-Thomas, who until May of that year worked at Project Empowerment, a program within the D.C. Department of Employment Services that offers job training and subsidies to residents who require “intensive employment assistance” with past histories of homelessness, substance abuse or criminal offenses, among other criteria.
At the time, the inspector general was probing whether Barnes-Thomas, who was hired at Project Empowerment in 2014 after completing the program and was eventually promoted to the role of program analyst, had used internal information to steal money from it.
On Sept. 29, a grand jury indicted Barnes-Thomas in the alleged scheme. She was charged with five counts of wire fraud, three counts of bank fraud, seven counts of aggravated identity theft and one count of first-degree fraud, according to an announcement from the U.S. attorney’s office in D.C. regarding the joint investigation that also includes the D.C. inspector general’s office and the U.S. Postal Inspection Service’s Washington division.
Between 2015 and 2018, Barnes-Thomas, 51, had devised a scheme to defraud the city’s government by reviving the profiles of 16 former Project Empowerment participants and modifying them in the DOES time management system to falsely indicate that they were working for a nonprofit, the indictment alleges. Barnes-Thomas then allegedly ordered prepaid debit cards linked to the fake profiles, prompting the D.C. government to request that Wells Fargo load them with cash.
Barnes-Thomas allegedly took steps to obscure her involvement by using the credentials of one of the nonprofit’s employees to enter time and setting up email accounts to help facilitate the scheme, according to the indictment. The prepaid debit card had cash withdrawn from them at ATMs in D.C. and Maryland, the indictment alleges. The Justice Department said in a news release that Barnes-Thomas’s actions are believed to have caused between $314,000 and $350,000 in losses.
Before joining DOES, Barnes-Thomas pleaded guilty in 2011 to stealing federal funds intended for public schools in Charles County, Md. while serving as an administrator for the school system. A federal judge sentenced her to 27 months in prison in connection to that scheme, in which prosecutors said she used Title I grants intended to provide classroom supplies for students in low-income areas. She used the money to buy personal items for herself, her family and friends, including iPods and a Nintendo Wii video game console. She was also ordered to pay $115,000 in restitution.
Dwight E. Crawley, an attorney representing Barnes-Thomas, declined to comment on the indictment Wednesday. Online court records indicate she has pleaded not guilty.
Diane Watkins, a spokesperson for DOES, said in a statement Wednesday that it would be “inappropriate and legally impermissible to make any comment or statement on the case, other than to note that the DC Department of Employment identified and referred the matter to the DC Office of the Inspector General.”
A spokesman for D.C.'s inspector general did not return a request for comment, but a copy of the Justice Department’s news release was posted to the office’s website on Tuesday.
Peter Jamison contributed to this report.