by Mike Donoghue, Correspondent, Vermont Business Magazine A Bristol businessman, who authorities said defrauded more than 100 customers out of $165,000 for custom wood products he never delivered over the past year, has been arrested on federal wire fraud charges.
David A. Conrad, 42, pleaded not guilty to the 5-count indictment when he appeared in US District Court in Burlington late Friday afternoon.
Federal Magistrate Kevin Doyle agreed to release Conrad despite heavy objection by the prosecution, which noted the defendant had no stable place to live and may have serious mental health issues. Conrad has been living in his truck in Burlington in recent days and it appeared he would continue to live there if released.
A federal prosecutor also said he was concerned Conrad appeared to commit new bank frauds in recent weeks even after US Homeland Security Investigations conducted a court-ordered search on Feb. 28 at his Bristol residence as part of the interstate investigation.
Conrad “has a strained relationship (at best) with his wife and their children” according to Assistant U.S. Attorney Jonathan Ophardt in a motion seeking the defendant’s detention. Conrad is no longer living at his residence.
Ophardt maintained Conrad was a risk to flee and a danger to the community. He also cited some mental health issues for Conrad and said the new indictment and arrest have created an incentive for him to flee.
Defense lawyer Chandler Matson of Stowe said Conrad would not disappear. Matson said he hoped to talk with Conrad’s wife to see if she would allow him to live in a camper that is parked on their property. Matson said his client had just started work earlier in the week at Consolidated Communications.
Conrad is a graduate of Champlain College, previously worked for UPS and did not have any drugs in his system when tested before court, Doyle noted. He ordered Conrad to report to the U.S. Probation Office each day and to refrain from possessing weapons.
Matson asked for 90 days to investigate the case and consider filing pre-trial motions. Doyle set a June 15 deadline.
Conrad began operating companies in 2021 using the names “Old Camp Woodworking” and “Vermont Custom Designs” out of the two-car garage attached to the family residence at 15 Broadview Estates. Conrad, the sole employee, set up Facebook accounts and stand-along websites with help from Wix. Conrad used Venmo and Square, now known as Block, to accept payments, the indictment said.
He created heavily-plagiarized websites using pictures from other businesses showing quality furniture to promote sales for custom-made wood products, including dining tables, dressers, bedroom sets, desks, coffee tables and other items, the indictment said.
It said Conrad at one point even provided the Vermont Secretary of State’s Office a false address for Old Camp Woodworking. It turned out to be the address for an established custom furniture and antique restoration business in Addison County, the indictment said. The company had no connection to Camp.
Between January 2022 and Feb. 28, 2023, when his home was raided by HSI investigators, Conrad developed a scheme to defraud customers in Vermont, New Hampshire and New York, the indictment said.
Conrad accepted payment through disbursement sites Venmo, Block, Wix and in cash with an expected delivery date for products within 12 to 16 weeks, the indictment said.
When customers complained about non-delivery, Conrad provided a litany of excuses, the indictment said. He claimed he had mixed up or confused orders, his grandmother had died, he and members of his family contracted COVID, he had a heart attack and he had cut off a portion of his finger, the indictment said.
Conrad had all full fingers when he appeared in federal court on Friday.
He would complete some work on ordered items in an effort to make his companies look legitimate, but the products were frequently of subpar quality resulting in customers seeking repairs or replacements, the indictment noted. He refused both.
Conrad’s websites indicated strict cancelation and refund policies, listing a 25 percent processing fee for orders canceled within 24 hours; a 75 percent processing fee for cancelations within 30 days; and no refunds for voided sales after 30 days.
He used those strict refund policies as the reason to keep payments from customers and would only offer some refunds to those posting negative online reviews of his products or who sued in small claims court, the indictment said.
The money Conrad received was used for his and family expenses, the indictment said.
While the indictment mentions over 100 customers, only five specific charges were filed. They involve payments of $650, $999, and $1,218 wired to him for dining tables, $874 wired for a bed frame and $599 wired for barn doors.
Special Agents from Homeland Security Investigation located Conrad on Thursday outside the New England Federal Credit Union on Shelburne Road in South Burlington. It was unclear why Conrad was at the credit union because he had been told multiple times his accounts were closed, records show.
He was jailed overnight without bail at the Northwest State Correctional Facility in St. Albans, pending his arraignment.
If convicted, Conrad faces up to 20 years in prison, a $250,000 fine, and restitution to victims, on each count. The government also filed a separate forfeiture notice in the indictment seeking $165,000 if he is convicted.
Conrad became aware in January that HSI Special Agent Josh Otey was conducting a federal investigation, but continued to commit fraud, Ophardt wrote in his detention motion. Conrad also made false statements to consumers about the federal investigation as he resisted providing refunds.
During the execution of the search warrant, Conrad was interviewed again and he acknowledged he had continued to accept more customer orders even when he knew he could never complete the work and said he had been “robbing Peter to pay Paul,” the motion noted. Conrad would send partial refunds to disgruntled customers with money obtained from new orders.
After the search of his property, Conrad told customers it was the police raid stopping him from completing the work, the motion said. It noted Conrad also reportedly claimed law enforcement made it clear if he did any work it could create more problems for him.
HSI agents served a letter on Conrad on March 9 indicating he was a target of a federal grand jury investigation and he was encouraged to contact an attorney. Matson joined the case March 14 and he worked with Conrad on a government request to take down his Vermont Custom Design website, records show.
Two days later, Homeland Security Investigations learned of possible ongoing fraud concerns from the New England Federal Credit Union, where Conrad and his wife had maintained multiple accounts, records show.
NEFCU reported incidents from Feb. 14, March 6, March 10, March 14, and two on March 15, court papers show.
