ABINGDON, Va. – The former president and director of Secor Inc., a federal halfway house that contracted with the Federal Bureau of Prisons (BOP) to house inmates, was sentenced last week to 15 months in federal prison for making false statements and wire fraud. Secor, Inc. was sentenced to one year of probation.   

Matthew Castle, 35, of Lebanon, Virginia, and Secor, Inc., through its counsel, pled guilty in November 2023 to one count of making materially false statements in a matter within the jurisdiction of the executive, legislative, or judicial branch of the United States, and one count of wire fraud.

Secor will serve a term of probation of one to five years. Additionally, Castle and Secor paid $208,105 in restitution, forfeited $40,000, and paid an additional $30,000 in fines.

“This sentence serves as another example to those doing business with the United States – if you commit fraud, you will be held accountable,” United States Attorney Christopher R. Kavanaugh said today.  “As one of the first cases investigated internally by the United States Attorney’s Office and our financial fraud investigator, this marks the beginning of a new era for corporate criminal enforcement in the Western District of Virginia.”

According to court documents, Secor was a residential reentry center, commonly referred to as a “halfway house,” for inmates from the BOP who were nearing the end of their federal prison sentences.

In 2018, Secor entered into a contract with the BOP that allowed some of the offenders under the care of Secor to be assigned to “home confinement,” meaning those offenders resided at an approved residence not owned by Secor.  BOP paid Secor one type of daily rate for offenders who resided at Secor’s facilities and a different monetary daily rate for those on home confinement.

Under the terms of the contract, Secor was required to outfit home confinement offenders with GPS monitoring equipment so the offenders’ whereabouts could be determined at all times.  In addition, Secor personnel were required to personally visit each offender’s residence on at least a monthly basis to ensure the offender was living at the offender’s assigned residence, in a safe environment, and in accordance with applicable rules.

In fact, Secor did not outfit many of the home confinement offenders with GPS monitoring and did not conduct home visits as required. Nonetheless, Castle routinely completed documentation certifying that he had conducted such visits, and in an effort to make it appear that such visits had occurred when they had not, he would make notations such as “things were going well,” and the offender “had no questions or concerns to address at the time.”

Each month, Castle submitted fraudulent invoices to BOP for payment, and BOP issued payments based on their representations that Castle and Secor were providing home confinement services in accordance with the contract.  

The case was investigated by the U.S. Attorney’s Office’s new Financial Fraud Investigator with assistance from the Russell County Sheriff’s Office and the Bureau of Prisons.

Assistant U.S. Attorneys Whit Pierce and Randy Ramseyer prosecuted the case.