Model Tobacco developer appeals prison sentence that factored in ‘post-arrest conduct’

Chris Harrison at the 2015 redevelopment announcement for the Ramada Inn project in Petersburg. (BizSense file photos)

Chris Harrison is appealing the six-year prison sentence he received in the embezzlement case involving his apartment conversion of the Model Tobacco building in South Richmond.

Attorneys for the disgraced real estate developer filed a notice of appeal earlier this month to the U.S. Court of Appeals for the 4th Circuit. They’re asking the court to review the judgment that sentenced Harrison, principal of Maryland-based C.A. Harrison Cos., to 71 months in prison and three years of supervised release.

Harrison’s attorneys had sought a 41-month sentence, or nearly three and a half years, which they said in court filings would hold him accountable for pocketing roughly $1.7 million from loan proceeds for the Model Tobacco project and another warehouse conversion in North Carolina.

Harrison, 53, was accused of putting those funds toward unauthorized expenses, including over $60,000 on four Rolex watches, other personal expenses including home mortgage payments, and litigation costs related to his failed redevelopment of the since-razed Ramada Inn hotel in Petersburg.

Prosecutors had sought a sentence of 135 months, or just over 11 years, arguing that a punishment above the government’s sentencing guidelines would deter others from committing similar crimes.

But in Harrison’s sentencing hearing in mid-June, according to a court transcript, U.S. District Judge David Novak called the government’s request “completely unreasonable in this case,” though he added that his sentence would be at the upper end of the guidelines in part because of “post-arrest conduct” by Harrison.

That conduct, according to the transcript, involved Harrison reaching out to commercial tenants at Model Tobacco and telling them to redirect rental payments to him directly, rather than to the bankruptcy trustee handling the Chapter 11 petition he filed in December.

The Art Deco-style Model Tobacco building along Richmond Highway.

Prosecutors said Harrison, who was arrested last fall and agreed to a plea deal in January, violated the terms of his bond release by threatening to terminate the tenants’ leases if they didn’t redirect the payments to him. Harrison’s bond was revoked in mid-May, and he served 27 days behind bars leading up to the sentencing.

“He cost himself at least two to three years because of that,” Novak said in the hearing, describing Harrison’s conduct as “really, here, regrettable.”

According to the transcript, Harrison gained over $30,000 from the redirected rental payments, contributing to the $1.7 million in ill-gotten gains that otherwise came from the loan proceeds for Model Tobacco and the North Carolina project.

In the indictment handed down against Harrison last fall, prosecutors alleged that he submitted more than a dozen falsified invoices and lien waivers in draw requests to Cedar Rapids Bank & Trust to secure over $3.6 million in loan proceeds, some of which was put into Model Tobacco’s initial phase, which Harrison completed in 2022.

Prosecutors maintained in the sentencing hearing that a higher sentence was warranted to ensure deterrence from others partly because Model Tobacco had been a successful project. The initial phase converted the property’s Art Deco-style main building into 200-plus apartments, called Model Tobacco Lofts. A planned subsequent phase to redevelop the rest of the complex has not been completed.

Addressing Novak in the hearing, Assistant U.S. Attorney Avi Panth said: “What makes this particularly egregious, in our view, is that the Model Tobacco project was successful. Mr. Harrison stood to make a tremendous amount of money. But even then, on top of that, there was greed, there was embezzlement. He had to take more.”

Harrison, center, celebrates with Model Tobacco team members after receiving a Golden Hammer award in 2023.

When Harrison’s attorney, Robert Cary, took issue with Panth’s use of the word “greed,” arguing that most of the money Harrison obtained from the loan proceeds was put back into Model Tobacco, Novak interjected.

“How many Rolexes did he buy? I want to tell you, that stood out to me,” Novak said. “A man does not need four Rolexes.”

Recalling a speech that he said former NFL coach Herm Edwards gave to rookie players about how to handle their newfound wealth, Novak added: “His speech is, a man only needs one of everything: one house, one car, one woman, and they only need one freaking Rolex. And when you start getting to three or four Rolexes, he’s right, it becomes about greed and losing your way.”

Active in commercial real estate for two decades, Harrison – a former UVA and NFL football player – had initially pleaded not guilty to a total of 12 charges that carried a combined maximum sentence of 32 years, including mail fraud, engaging in monetary transactions with criminally derived property, aggravated identity theft and three additional counts of wire fraud.

The remaining wire fraud count involved in the plea deal relates to a 2021 invoice from a construction vendor for Model Tobacco that Harrison is alleged to have fabricated and inflated from about $35,500 to over $95,000 to induce the bank to disburse an inflated loan amount. The charge carried a maximum sentence of 20 years.

The other charges were dismissed as part of the plea deal reached in January, weeks after Harrison’s bankruptcy filing that followed a request from Virginia Housing to put the property under receivership because it said loan payments hadn’t been made since May 2024.

Virginia Housing was listed in the bankruptcy petition as the primary creditor of Harrison’s Model Tobacco Development Group LLC, which owns the 15-acre complex at 1100 Richmond Highway. The petition listed Virginia Housing as being owed $34.7 million on a construction loan for the project.

Harrison at a ceremony in 2022 when the building’s signage was illuminated for the first time in decades. (BizSense file)

In delivering his sentence, Novak described Harrison as having found success not only in real estate but also on the football field and in life, acknowledging character letters from family members and supporters, many of whom also were present for the hearing.

Addressing Harrison, Novak said of the crowd, “That should tell you something. That’s not the norm at sentencing, just so you know that.”

Later, Novak added: “You’re immensely talented. And I’m not talking about football. You’re so much more talented than that. I mean, obviously that’s your persona, to some extent, from your time at UVA and in the pros, but your drive, your intellect, and your heart, I think it comes out here very prominently that you’re a special human being. But you lost your way a little bit.”

In his remarks before sentencing, Harrison apologized to the court and to his family and friends.

“It was not – it was never my intention to do any harm to anyone associated with the project, with my family,” Harrison said. “I realize the results of my actions and the tremendous toll that it has taken on the project and all of the people here who love and support me, and to all those that have been affected by my actions, I’m sorry.”

Novak responded with words of encouragement for Harrison.

Referring again to Herm Edwards’ speech, Novak told him: “I’ve thought about that speech many times in my life, you know, because we all get tempted by things, right? But you know what’s important. The most important (things) in your life are your daughters, right, your family, your friends who clearly love and deeply respect you, right, and your good works.

“I say that to you because the real measure of a man is not what they do when things are going great. Everybody can love you when you’re the football player and you’ve got money and stuff. Right? The real measure of a man is what happens after they stumble and fall. Do they get back up and try to do good things with their life or do they say, ‘Oh, woe is me, this should have never happened to me.’

“What I’m saying to you is, you have the ability to stand back up and show your daughters who you really are as a human being,” Novak said. “Learn from this experience and then do good works when you get out. And you’ve done a lot of good works. You’re getting credit for that.”

Concluding his comments, Novak added: “So when you’re sitting in custody and you’re going to take classes or do whatever you want to do, I want you to ask yourself, was that Rolex really worth where you’re at? Because that Rolex to me is a symbol of the mistakes that you made.”

Harrison’s notice of appeal was filed July 1 by Cary, who represented him in the criminal case along with Williams & Connolly colleague Ashwin Shandilya. The appeal was docketed July 7. No other hearings in the case have been scheduled.

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