NEW ORLEANS — A former top military aid to three U.S. presidents and his business partner were sentenced to 8 and a half years in prison each for scamming $15 million out of foreign nationals who believed they'd become permanent American residents if they invested in New Orleans' recovery from Hurricane Katrina.
Retired Air Force Colonel Timothy Milbrath and William "Bart" Hungerford were each sentenced to 102 months in prison by U.S. District Judge Greg G. Guidry Tuesday.
The two men were convicted on all counts of a superseding indictment in a September 2019 trial but in-person sentencing couldn't be held due to COVID-19.
“This was a very detailed and complex case with many moving parts, but it in the end, it ultimately all comes down to greed. This elaborate scheme to defraud our community, taxpayers and those lawfully seeking permanent residency in the United States, occurred in the wake of one of the most tumultuous times in our city’s history, which makes this crime more egregious. Attempts by perpetrators to conduct fraudulent schemes will not be tolerated,” stated U.S. Attorney Duane A. Evans.
Milbrath served as the White House Military Office’s chief of staff under Presidents Ronald Reagan, George H.W. Bush and Bill Clinton. He and Hungerford solicited millions of dollars for job-creating projects in New Orleans from 31 immigrant investors hoping to earn green cards in return for their investments.
However, to secure permanent residency, the investors — who arrived in the U.S. on visas — had to prove their money was creating jobs.
The investments did appear to create jobs, but not ones that were in projects approved by the U.S. Citizenship and Immigration Services, which administers the EB-5 visa program for foreign investors.
WWL-TV first reported on the investigation that ensnared Milbrath and Hungerford in 2013.
Prosecutors said Milbrath, 65, and Hungerford, 60, diverted the money to their own company and salaries for themselves and their wives; PJ’s coffee shops that were already running and profitable; and a proposed hotel in Algiers that remains a vacant lot.
Milbrath and Hungerford touted the plans to build an extended-stay hotel, conference center and Wow! Café and Wingery on General de Gaulle Drive as a boon for Algiers and a way to diversify projects and minimize risk for investors. It did neither because they never moved past the demolition stage.
Meanwhile, the duo each pocketed $4.7 million that they spent on cars, a vacation home, country-club property and tuition for their children. Milbrath alone spent $300,000 on vintage postcards, prosecutors said.
They also paid their wives salaries, arguing at trial that they needed them to run the business if they couldn’t.
“I was in charge of the continuity of the president,” Milbrath said from the witness stand in September 2019. “If something happened to the president and there was a change in leadership I was in charge of making sure that worked smoothly. So, if anything happened to us, I chose my wife and Mrs. Hungerford because they knew what we were doing.”
Though they were granted temporary green cards, none of the investors at the center of the case became permanent residents.
