Hampton man pleads guilty to scamming victims out of more than $630,000

A Hampton man pleaded guilty last week to bilking several victims — most in Hampton Roads — out of more than $630,000 in cash over six years.

Federal prosecutors say Clarence M. Rice Jr., 54, falsely told the victims he stood to get a multi-million dollar insurance settlement from his father’s death in an industrial accident years earlier. But to get that payout, Rice told them, he first needed to be clear of all his debts.

He told the victims — including a bricklayer and a blind man — that they’d get a nice return if they helped with the debts.

“He tricked victims into giving him large sums of money using the false representations,” the U.S. Attorney’s Office said in a recent news release. These victims “were of limited financial means and suffered substantial hardship from his fraud.”

The scheme ran between 2013-19, according to a statement-of-facts that federal prosecutors, Rice and his public defender agreed to as part of a Dec. 28 plea deal.

In 2013, the statement said, Rice told a bricklayer friend, now 75, about the fake settlement and the “purported condition of his inheritance that he repay all of his existing debts.” Over the next six years, that man gave Rice about $370,000.

Rice also relied on the bricklayer to introduce him to numerous other victims who also forked over hundreds of thousands of dollars.

In June 2014, Rice said he needed more money, so the bricklayer introduced him to a friend who is blind. That man, now 74, paid Rice $143,000 over six years, the statement said.

The bricklayer also encouraged another man — for whom he served as a father figure — to invest with Rice, because it seemed like “a good opportunity with a guaranteed return,” the statement said. As part of the scheme, Rice, his attorney and the man met at the lawyer’s office to “execute promissory notes to purportedly document the legitimate transactions.”

That victim gave Rice about $95,000 in 2015, the statement said.

The bricklayer also encouraged a Georgia couple — his daughter and son-in-law — to invest with Rice. They likewise agreed, paying Rice $24,000.

To entice the couple to invest, the statement said, Rice got the son-in-law on a three-way conference call with a man who purported to be working for a company that was “managing Rice’s inheritance.”

But the bricklayer got suspicious as the years passed without a payout, and he went to the Norfolk Police in early 2017.

During an interview with a Norfolk detective that year, Rice asserted the cash from the victims was for “legitimate loans and investments.” He denied telling the victims he needed the money for a death settlement, instead saying it was for a wrongful death lawsuit.

The Norfolk Police referred the matter for a federal investigation. Over the next several years, the statement said, IRS special agents unraveled the case.

The agents found that Rice cashed most of the “hundreds” of checks he got from the victims rather than depositing them in traditional bank accounts. They also found that he “hid” much of the bilked money on pre-paid stored value cards — with deposits to the cards typically made the same day the victims gave him money.

“The defendant maintained a cash lifestyle,” the statement said. “This made it difficult for investigators to trace his taxable income and fraudulent transactions.”

Despite all the money coming in, the statement added, Rice didn’t file tax returns between 2015-17, when his tax bill would have totaled $52,000 over the three years.

When IRS agents interviewed Rice in October 2019, he first told them he hadn’t filed his taxes since 2011 because he thought he had three years to file.

But when agents told him it had been nearly a decade, Rice said he didn’t earn enough to file — even though he had earlier told agents he made up to $90,000 a year as a tow truck driver, race car driver and in real estate.

Rice was arrested Sept. 16 and charged in Newport News with 10 felonies — two counts of wire fraud, five counts of money laundering and three counts of tax evasion. He pleaded guilty Dec. 28 to one count apiece of wire fraud and tax evasion. The other charges will be dismissed as part of the plea agreement.

U.S. District Judge Arenda Wright Allen will sentence Rice on May 25, when he faces up to 25 years in prison. Rice’s lawyer, Assistant Federal Public Defender Kirsten Kmet, could not be immediately reached.

Peter Dujardin, 757-247-4749, pdujardin@dailypress.com