Developer Chris Harrison has pleaded not guilty to embezzlement at the Model Tobacco Hotel, Petersburg

A developer facing federal embezzlement charges related to the Model Tobacco Lofts in South Richmond and the canceled redevelopment of the former Ramada Inn in Petersburg has pleaded not guilty to all charges and is seeking a jury trial to prove his case.

Chris Harrison, director of Maryland-based CA Harrison Cos., was arrested Oct. 17 — the same day his indictment was announced — and released on his own recognizance after his first appearance at a federal courthouse in Richmond.

He was arraigned last week and pleaded not guilty to charges including wire and mail fraud, money laundering and aggravated identity theft.

The charges carry a combined maximum sentence of 32 years in prison, although actual sentences for federal crimes are generally less than the maximum sentences.

Harrison, a former UVA and NFL football player who spent two decades in commercial real estate accused by the U.S. Attorney’s Office for seizing loan proceeds for the Model Tobacco project and a similar building conversion in North Carolina and diverting some of the funds to unauthorized expenses, including legal fees related to his failed renovation of the since-demolished Ramada Inn in St. Petersburg.

Harrison, 52, allegedly submitted more than a dozen false invoices and lien waivers in sweepstakes requests to Cedar Rapids Bank & Trust to obtain more than $3.6 million in loan proceeds, which he used for personal expenses and trial in St. Petersburg.

According to the Oct. 15 indictment, which was initially unsealed but later unsealed at the request of prosecutors, the personal purchases include a $12,500 PNC Bank mortgage payment on Harrison’s personal residence, a $10,000 jeweler for a down payment on a Rolex, and a $9,600 dollars to a law firm to pay court costs related to the trial in St. Petersburg.

Other expenses listed in the indictment include $4,000 for tuition and tutoring for his minor child, $3,000 for landscaping services at his D.C. residence and $1,000 for a luxury clothing store.

The funds allegedly come from $22 million in loans from Cedar Rapids Bank for the Model Tobacco project and a project in Winston-Salem, another former tobacco building conversion called Whitaker Park. The loan agreements prohibited Harrison from using the proceeds to pay himself or affiliates or from using the proceeds for personal expenses.

Harrison allegedly created a company called Virginia Demolition LLC, which he said did work on projects, including work that preceded the formation of the LLC, but had no employees, equipment or office space, according to the indictment.

He also allegedly falsified and inflated invoices in the name of a construction supplier for Model Tobacco, prompting a Cedar Rapids bank to issue inflated loan amounts. The indictment alleges that Harrison prepared some of those documents with an unnamed “co-conspirator.”

Harrison has been appointed by federal public defender Paul Gill to represent him in the case, which is scheduled for a Nov. 4 teleconference.

District Judge David Novak is presiding over the case. Kashan Pathan and Avi Pant of the U.S. Attorney’s Office for the Eastern District of Virginia are prosecuting the case.

Harrison completed the first phase of Model Tobacco, a mixed-use project that transformed the Art Deco building and 15-acre complex along Richmond Highway into 275 income-producing apartments. The first phase included 203 apartments and included plans for an entertainment centre. Harrison told BizSense in 2020 that the milestone is valued at about $59 million.

Two of his investors in the project sued Harrison in 2022, accusing him of fraud and money laundering to gain control of the project. Claim was released last year after reaching a confidentiality agreement. Subsequent court documents related to that dispute revealed that the settlement included a judgment of $6 million.

The Model Tobacco deal follows another agreement reached in 2022 between Harrison and the city of Petersburg. In that deal, which settled the Petersburg lawsuit, Harrison sold the city the former Ramada Inn property, which was once planned for rehabilitation at a cost of 20 million dollars.

Petersburg paid Harrison $1.25 million for the blighted property – $500,000 more than it paid for it four years ago. City has since been demolished nine-story building that was prominent along Interstate 95 and plans to redevelop the 2-acre site on Washington Street.

In addition to Model Tobacco, Harrison’s other projects in Richmond included the 75-unit 2001 East Apartments at 2001 E. Broad St. and the 66-unit redevelopment of Argon Apartments at 3805 Cutshaw Ave. Harrison sold these properties in 2017. for $9.6 million and 10.2 million dollarsin accordance.