Judge denies bond for Peninsula landlord
Merryman faces 30 charges, including fraud, racially charged threats to tenants
NEWPORT NEWS — A federal magistrate on Thursday denied bond for a Peninsula landlord facing numerous federal fraud charges.
David Lee Merryman, 58, of Hampton, is being held at the Western Tidewater Regional Jail on charges that he violated tenants’ rights with race-based threats of eviction and forged tenants’ signatures on applications for pandemic housing assistance grants.
Merryman — arrested Jan. 18 by U.S. Marshals — sought to be released from custody pending trial. But after a three-hour hearing Thursday in federal court in Norfolk, U.S. Magistrate Judge Lawrence Leonard ordered that he remain jailed.
Leonard agreed with federal prosecutors that there are no conditions of release that can “reasonably assure” the safety of others or Merryman’s appearance at future court hearings.
On a checklist of deciding factors, for example, Leonard checked off boxes saying the evidence against Merryman is “strong,” that he faces a lengthy sentence if convicted, that he has a prior criminal history and a history of violence, among other factors.
Merryman — who owns more than 60 residential rental properties as well as a landscaping firm — is accused of using racial slurs and taunts against Black tenants as he threatened them with eviction, according to a federal indictment prosecutors filed in January. In some cases, the indictment asserts, Merryman threatened to kill or injure his tenants — sometimes combining such threats with racial epithets.
“Merryman allegedly engaged in physical assaults and other threatening behavior towards tenants, including on one occasion striking a tenant in the face with a shovel and on another occasion attacking a tenant with the blade of a chainsaw while it was off,” according to a U.S. Attorney’s Office news release at the time of the January indictment.
The landlord is also accused of obtaining money under false pretenses by telling tenants he would repair properties but never doing so. That led to tenants paying Merryman “significant upfront fees for neglected, even uninhabitable, properties that Merryman never intended to improve,” the indictment said.
Moreover, Merryman is accused of submitting fraudulent applications for rental relief benefits from the government during the pandemic.
The indictment lists several instances in the spring of 2021 in which he submitted such false applications, garnering $77,520.
The 30 federal charges include 10 counts of wire fraud, four counts of interfering with another person’s housing rights, two counts of making threats over a phone line, six counts of stealing government money, four counts of aggravated identity theft, and four counts of making false statements on housing assistance applications with the Department of Housing and Urban Development.
During the pandemic, Merryman complained several times to a reporter about the government rental relief programs, saying many tenants were getting paid under the programs — often using the cash to buy new cars or other personal items.
But he said they still wouldn’t pay him the rent they owed because of protections in place barring the landlord from evicting them. He asserted the government relief money should be going to landlords
directly rather than to tenant
The trial is scheduled to begin in April before Senior U.S. District Judge Raymond Jackson. But it’s likely to be delayed significantly by an agreement by both sides that it’s a “complex case,” requiring more time to prepare.
Merryman’s attorney, Andrew Sacks, said Friday that he “respectfully differs” from Leonard’s ruling to deny bond, with the lawyer saying he believed he presented sufficient evidence to warrant pretrial release.
Sacks said Merryman reached an agreement with a real estate firm to take over the day-to-day management his properties.
“It’s a very qualified woman and her husband, and they have been managing properties for many years,” Sacks said. “They have hundreds of properties … And he would not have to have contact with the tenants. So any concerns
about that would be alleviated.”
Sacks also submitted letters from seven Spanish-speaking tenants — immigrants from Mexico, Honduras and elsewhere — indicating they’ve had no issues with Merryman.
“I live in this place for 14 months,” tenant Adela Riera wrote about her home on 32nd Street in Newport News. “I like the place where I live. I don’t have any problems with Mr. Merryman. I would like him to be free.”
Sacks said Merryman would have been living with family in Norfolk.
But prosecutors disagreed with a bond for Merryman, highlighting the extremely poor treatment of his tenants as outlined in the indictment. They also noted past criminal charges to his name.
In 2014, Merryman pleaded guilty in federal court to submitting false claims to the Virginia
Employment Commission in 2009 to obtain about $27,000 in unemployment benefits. That included falsely stating he was unable to find work, even while he was running his landscaping business, MGM Grounds Maintenance. He served about a month behind bars at that time.
Also that year, the U.S. Labor Department ordered Merryman to pay about $51,000 in back wages to 43 employees, $25,000 in damages and a $7,500 civil penalty for “willful and repeat violations” of federal wage standards, according to court records. Among other things, the Labor Department said Merryman didn’t pay overtime rates when employees worked more than 40 hours a week, paid a flat rate that often didn’t equate to minimum wage and improperly docked employees pay for damaging property.
In 2022, the Labor Department had Merryman
arrested and ordered him to pay another $45,846 in back wages and damages to workers for violating labor rules.
Separately, then-Virginia Attorney General Mark Herring sued Merryman in September 2021, accusing him of “blatant” and “egregious” housing discrimination. The lawsuit contends Merryman makes lots of promises to his tenants before they move in. But after they sign the lease, the complaint maintains, Merryman often refuses to make the promised repairs, leaving the tenants — typically Black women with children and on government assistance — living in substandard conditions.
A five-day jury trial was supposed to take place in that case in late February in Newport News Circuit Court. But it was postponed on account of the pending federal charges.