The leaders of Verona-based company Nexus are fighting multiple cases in the federal and local courts. WMRA's Randi B. Hagi reviewed more than 40 current and former cases, and filed this report. Please note that this story does include brief mentions of reported sexual abuse.
As a maelstrom of court cases centering on Nexus wind their way through the legal system, one could end with company leaders in cuffs at the hands of U.S. Marshals. And in another, sexual abuse allegations have come to light.
Nexus's primary business has been connecting immigrants in ICE detention with bonds. Nexus then charges the clients fees for ankle monitors meant to ensure they show up for their immigration hearings. Throughout the years, Founder Michael Donovan and his husband and former co-owner, Richard Moore, have had side endeavors in entertainment, housing, and other businesses.
RLI Insurance Company v. Nexus
The threat of imprisonment most immediately looms in a case playing out in the U.S. District Court for the Western District of Virginia. It's dragged on for five years because of what Judge Michael F. Urbanski dubbed Nexus' "abject intransigence" and repeated disregard of court orders.
In 2018, RLI Insurance Company sued Nexus for reneging on their business agreement, through which RLI was issuing bonds for Nexus' clients. In 2020, a federal judge ruled that Nexus owed RLI $3.3 million, and had to turn over their business records. Since Nexus repeatedly failed to provide the records, the court imposed thousands of dollars in sanctions. This also did not bring them into compliance. In early June, Judge Urbanski ordered that the company had until June 30th to produce the documents, or else the court would order U.S. Marshals to take Micheal Donovan and Vice President Evan Ajin into custody until they handed over the records. (Readers may note that the spelling of Donovan's first name changes from one document to another, and we've reflected that here.)
On the 30th, RLI reported to the court that the night before, Nexus handed over some documents. More were delivered the next evening. The court has ordered RLI to review these documents by August 15th, and notify the court whether or not Nexus has given them all the required records.
One factor belaboring the proceedings has been the revolving door of Nexus attorneys. Court records show that nine attorneys or law firms have withdrawn from representing Nexus in this case alone, and at least two have gone on to sue Nexus for unpaid legal services.
In the meantime, RLI has tried to garnish Nexus' assets from at least seven banks across the state, based on records in the Augusta and Rockingham County Circuit Courts. One bank sent RLI $150, and the rest responded that Nexus didn't have any money there.
RLI has also filed for garnishment with a Verona-based company called Subversivo LLC. As of June 20th of this year, Subversivo still had not answered whether or not it held Nexus assets. The LLC was formed in May of 2022, and its registered agent is a man named David Dow See. There are LinkedIn and Instagram profiles for a David See listing him as a Nexus employee and wearing company garb. There's also a Subversivo LLC based in Delaware that advertises immigration bond services on its website.
This week, RLI also filed for any Nexus assets held by a man named David Zimmerman in Verona. Zimmerman, who lives across the street from the Augusta County Sheriff's Office, was sued by Nexus following altercations between Nexus and the sheriff and his supporters. A post on the website "Breaking Through News" – which features articles written by Moore and Donovan's son, and other former cast members of a Nexus-produced TV show – states that Zimmerman agreed to settle for $10,000. RLI could be attempting to intercept that payment.
Augusta County exploitation charges
Last October, law enforcement agencies raided Donovan and Moore's home and the Nexus offices, as The News Leaderpreviously reported. They were searching for evidence related to a life insurance payout that was supposed to go to Zachary Cruz – a young man whose brother is the convicted Parkland school shooter. Zachary was taken in by the couple after the highly publicized shooting.
MetLife Insurance owed Cruz more than $400,000 following his mother's death. Court records state that FBI agents discovered Donovan called MetLife in 2019 to file a claim for that money on Cruz's behalf. Cruz then opened a joint checking account with Moore, where the money was deposited by Nexus employees. Federal investigators believe one employee, Timothy Shipe, impersonated Cruz on the phone with MetLife.
Four days after the life insurance checks were deposited, Moore wired $300,000 of it to an account owned by a law firm, which then wrote a check of the same amount to the IRS for delinquent taxes that Nexus owed. The next day, another $100,000 was transferred out of Moore and Cruz's account that the FBI says went to BMW and Ferrari car payments and credit card bills.
Cruz told a federal grand jury that he didn't remember receiving the money or ever discussing it with Donovan or Moore, although he said, "if anyone, I would've given it to Mike and Richard."
Moore and Donovan have both been charged with two counts each of obtaining money through false pretenses and exploiting a mental incapacity for financial gain. Timothy Shipe was also charged with one count of each crime. A trial is scheduled to begin on December 11th.
Sexual abuse allegations
But while law enforcement was searching Nexus properties for evidence in that case, they also executed a search warrant for a different investigation. That's because an allegation was made to the sheriff that Donovan and Moore had repeatedly sexually abused a teenage boy starting at the age of 16.
No charges have been filed in relation to that allegation, and the court records currently available do not show whether or not evidence of sexual abuse was found in the raid. Under Virginia law, an adult having sex with a 15, 16, or 17 year old is a class one misdemeanor.
Donovan did not respond to two voicemails seeking a comment about this allegation. But I was able to reach Moore by telephone. The transcript of our conversation is below.
[phone rings]
RICHARD MOORE: Hello?
RANDI HAGI: Hi, my name is Randi Hagi. I'm a radio reporter with WMRA News. I'm calling for Richard Moore.
MOORE: This is Richard.
HAGI: Hi, Richard. I want to let you know at the beginning here that I am recording audio of this conversation. But I'm calling because, in one of the search warrants that was executed at your home and business back in October, there are details of an allegation of sexual abuse against you, and I wanted to know if you wanted to comment on that.
MOORE: I'm sorry, can I have somebody, have my, somebody call you back? I don't – I'm confused right now and I'm traveling right now. I have no idea what you're talking about. But I will tell you that if you run a story that's not factually accurate, then we'll end up in court.
HAGI: Sure, yeah, the – I'm referring to the allegation that's laid out in the search warrant. I believe it's from, October 5th was the search warrant.
MOORE: Did you see the federal plea my son has filed in that case?
HAGI: No, no, I haven't. What's the, what's the plea?
MOORE: No, of, of, of course not, you haven't. Because that would require journalistic integrity. Which, I'm sure somebody put you up to making this phone call in the first place, since you got my phone number from somebody. I will have somebody call you back.
HAGI: Okay, when, when might that happen? [line goes dead]
Nobody directed me to make that phone call, and I got Moore's number from county court records. Moore's attorney did contact WMRA later that afternoon, but did not arrange another interview with his client in the following week and a half. However, I was able to locate the federal lawsuit that Moore referenced.
Following the execution of the search warrant, Donovan and Moore's son sued the person who made the allegation of sexual abuse against his parents, as well as that person's mother, Sheriff Donald Smith and Major Brian Jenkins. WMRA is choosing not to include either young man's name at this time due to the traumatic nature of both allegations.
The son claimed that the person making the allegation against his parents had abused him beginning when he was 11 and the other boy was 14, and continuing until they were 16 and 19, respectively. Court documents show that the son filed for a protective order against the other boy one or two days before the other boy went to speak to the sheriff. Both are now over the age of 18.
Court documents also state that the other boy's mother is a former Nexus employee. She testified before a federal grand jury that indicted Moore on 10 felony charges in 2021, and reportedly expects to testify in that upcoming trial, in which Moore is accused of withholding $1.5 million in federal taxes.
Consumer Financial Protection Bureau, et. al, v. Nexus
In another federal case that WMRA has been following, the Consumer Financial Protection Bureau, or CFPB, and the state governments of Massachusetts, New York, and Virginia sued Nexus, Michael Donovan, Richard Moore, and Evan Ajin. The plaintiffs allege Nexus broke consumer protection laws by misleading and threatening clients in their immigration bond business.
After the CFPB began their investigation, Nexus sued the agency in 2017, claiming that the CFPB is unconstitutionally structured and overstepped its jurisdiction in their "extremely broad and overly burdensome" demands for information about Nexus' business practices. A federal judge in D.C. dismissed that lawsuit in 2018.
In May, Federal Judge Elizabeth K. Dillon entered a default judgment against Nexus in the CFPB and multi-state case because the company repeatedly did not comply with court orders.
The CFPB and state governments filed a memorandum on June 23rd seeking a total of $580 million in civil penalties. What the court will actually order Nexus to pay will likely be decided after a hearing scheduled for August 15th and 16th.
When a company can't pay its court-ordered bills
Nexus attorneys have said in hearings that the company can't afford to pay thousands of dollars in sanctions. So what does that mean for the millions in judgments they already owe to RLI and other plaintiffs – not to mention whatever the court rules in the CFPB suit?
An attorney who spoke with WMRA about general legal procedure explained that, in civil cases in which a company owes other entities money, the plaintiffs can seize whatever assets the company has, liquidate them, and divide the money among the creditors. In some circumstances – for example, if company leaders have improperly mixed their personal and business accounts – those individuals could have their personal assets seized. If they or the company don't have enough assets to cover the amount owed, however, the creditors are out of luck.
Several properties owned by Nexus have recently been foreclosed on. On Wednesday morning, a small handful of bidders and spectators gathered on the front steps of the Augusta County Circuit Courthouse for a public auction of four pieces of real estate. A home in Stuarts Draft went to one bidder for $270,201. A house and a vacant lot on Windsong Court in Fishersville, plus the company's office building in Verona, went back to the lender – which was represented at the auction by Frank Root, president of Countryside Holding Company, Inc. The foreclosing attorney, Jeff Ward, explained that Donovan and Moore hoped to keep the residential properties, and had 24 hours to make financial arrangements to do so.
… and a sampling of the rest.
Other current cases embroiling the company leaders include perjury charges against Moore in Louisa and Augusta counties.
In the past, Moore has been convicted of seven felonies and two misdemeanors in Virginia, and Donovan has been convicted of 10 felonies, for writing bad checks, obtaining money by false pretenses, and grand larceny. These counts are based on records from nine different courts across Virginia of crimes that took place around 2000 and 2010.
After Moore was arrested on the federal tax fraud charges, prosecutors filed a document in the Augusta County perjury case requesting that Moore's bond be revoked and he be re-arrested, in part because "the defendant has 17 prior felony convictions for various fraud and larceny charges." The motion does not specify where else besides Virginia those convictions took place.
Nexus is trying to appeal contempt sanctions in a federal case in which former Libre by Nexus clients filed a class action lawsuit against them. They claimed Nexus "preys on detainees' vulnerability and limited understanding of English to foist crushing financial terms and GPS shackles on detainees." The parties settled out of court for $3.2 million in 2021, but Nexus was found in contempt this January for not paying up.
In 2019, Nexus settled a similar lawsuit with three former clients in New York for an undisclosed amount. In another case that year, a lawsuit filed by six former clients in Virginia ended in arbitration – a dispute resolution process that takes place outside of the courts.
Sherman-Stoltz Law Group sued Nexus in the Augusta County Circuit Court last year for unpaid legal services they provided in civil immigration and criminal cases. Last month, a judge ruled that Nexus owed the firm $1.1 million.
Former employees have sued Nexus at least six times in federal court. In four cases, Nexus settled out of court over allegations of not paying overtime wages and illegal surveillance of the employees. Those settlements, where not confidential, ranged from $13,000 to $25,000 per person. A fifth suit, claiming unpaid wages, ended in a judgment of $70,000 split between two people.
The sixth suit was dismissed by the court. In it, a man named Ryan Alvarez sued Nexus for wrongful termination and religious discrimination. His complaint included an incident in which Alvarez, a Mormon, was purportedly disciplined because he attended a Mormon church service during a Nexus conference instead of a "mandatory" worship service led by Donovan.
Between lawyers leaving, court orders going unmet, and millions of dollars owed with potentially steeper bills on the way, it remains to be seen how long Nexus can continue to brawl in the arena of the U.S. legal system.
