By JAY CONLEY
THE ROANOKE TIMES

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   Federal prosecutors said Friday they will retry Richard Burrow and will use new evidence from a National D-Day Memorial Foundation insider to prove that the former foundation president defrauded banks and the state of Virginia in raising funds for the $25 million monument in Bedford.

    The statements came as prosecutors said they would seek to have the old charges against Burrow dismissed. That is a legal maneuver that will allow them much more time to prepare their case and re-indict him on similar charges.

    U.S. Attorney John Brownlee said he expects a re-indictment of the charges to go forward within 90 days. Burrow's lawyer said he would be ready for the retrial.

    The linchpin of the government's new case are statements by Robert L. Harrison Jr., the former attorney for the National D-Day Memorial Foundation. To avoid indictment on wire fraud charges himself, Harrison has agreed to testify against Burrow.

    Harrison, 44, of Bedford served as the D-Day foundation's legal adviser from 1996 until 2000.

    In a written statement prosecutors distributed Friday, Harrison claims that Burrow intentionally falsified documents in order to acquire $3.5 million in matching grants from the state.

    "The money that Burrow used to obtain the $3.5 million state grant simply did not exist," Harrison said in the statement.

    According to his statement, Harrison advised Burrow that he needed bona fide pledges to serve as collateral in order to obtain at least $3.5 million in bank loans and state grants. Harrison said he improperly verified to a bank and the state that the applications were in proper legal order without ever seeing verification of the pledges.

    "I ignored clear warnings and signs that Burrow was intentionally defrauding the state of Virginia," Harrison said in the statement. "The foundation's method ... was illegal."

    To avoid a felony charge of wire fraud, Harrison entered into a pretrial diversion agreement with prosecutors Friday afternoon. Under the agreement, Harrison will serve a year of probation, pay a $12,500 fine and report his actions to the Virginia State Bar Association.

    "I believe it's a powerful statement," U.S. Attorney John Brownlee said Friday. "Mr. Burrow came to him [Harrison] with a plan to defraud the state."

    Burrow's defense attorney, John Lichtenstein, said the government was trying to put a positive spin on the case being dismissed and simply wants to drag Burrow even further through the court system.

    "If this case is rebrought, Richard Burrow will be ready and prepared for trial," Lichtenstein said in a written statement. "This terrible decision by the government will subject Richard Burrow, the National D-Day Memorial Foundation, and now, apparently Mr. Harrison to the obviously unnecessary, costly and harmful effects of this prosecution."

    How Burrow raised funds to match state grants was a key point of contention during his trial in December on mail, wire, bank and loan application fraud charges. Essentially, he used grants as collateral for bank loans and the loans as the "match" for grants.

    Burrow testified that Harrison told him those transactions were legal. But Harrison said that on two occasions in 1998 and in 2000, he advised Burrow that it was improper to use bank loans as collateral to obtain state grants unless the loans were backed up with pledges coming into the foundation - and Burrow never showed all the pledges.

    "I ignored the fact that the foundation did not have enough pledges to pay back the $3.5 million loan," from a California bank, Harrison said.

    Harrison was not called to testify in the December trial.

    During the trial, a judge declared that there was insufficient evidence that Burrow committed fraud against the foundation. At the end of the trial, the jury deadlocked 5-7 in favor of acquitting Burrow on charges that he defrauded the state and bank. Senior U.S. District Judge James Turk then declared a mistrial.

    Since then, prosecutors have been deciding whether to retry the case.

    Turk ruled Wednesday that prosecutors had to retry the case within 10 days or he would dismiss the charges "without prejudice." That distinction allows prosecutors to go before another grand jury and re-indict Burrow on the same charges through 2006.

    "I deeply regret my role in Burrow's scheme," Harrison stated. "I now recognize my conduct was improper."

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