By KELLY HANNON
One or both owners of a downtown Fredericksburg grocery store are being investigated in connection with a large theft of money from the Virginia Railway Express, court records show.
Police looking into more than $200,000 worth of missing funds recently seized items from Nader's Grocery at 508 Caroline Street as part of the investigation.
An affidavit for a search warrant filed yesterday in Fredericksburg Circuit Court lists Peter and Ainese Kang as the owners of the grocery store. The document frequently mentions "Kang," but never specifies which Kang is being referenced.
An employee answering the phone at Nader's Grocery yesterday said neither Kang was available to comment.
Detective Ed Milner of the Alexandria Police Department is investigating possible charges of receiving stolen property, money laundering and embezzlement, the affidavit states. The VRE main offices are in Alexandria.
The store is being investigated in connection with Jessica Funk of Lake Ridge, a former VRE accounting employee, who had a related embezzlement charge sent to an Alexandria grand jury in May of last year.
The affidavit states that Funk was fired and prosecuted for her role in the theft of funds, but the result of that prosecution was not available last night.
A VRE audit done eight months after Funk was fired revealed that $203,705 worth of Metrocheks were missing, the affidavit states.
The Metrochek program gives federal workers up to $110 a month to spend on public transit, including VRE.
Commuters can redeem their Metrochek for VRE tickets at 13 locations in the Washington area, including Nader's Grocery, which is across from the Fredericksburg train station. Whistle Stop Coffee at the Quantico train station and 7-Eleven at 327 Deacon Road in Stafford also accept Metrocheks.
The $110 maximum is not enough to pay for a full month of tickets. A monthly VRE pass from Fredericksburg to Union Station costs $243.70.
Commuters would give their Metrochek to Nader's, then pay the remainder of the balance with cash or checks.
In the audit, VRE learned another vendor location, Casey's Gift Shop in Washington, D.C., submitted a $227,528.22 payment to Funk in 2005.
The payment was a combination of cash and Metrocheks. The cash was reported, but $203,705 in Metrocheks was not. Funk processed this transaction, the affidavit said.
VRE later conducted an audit of all of its vendors and discovered that Nader's had "an alarming discrepancy" in the invoices, Milner wrote.
The convenience store stopped sending any cash or check payments to VRE in December 2004.
From July 2003 to July 2004, 80 percent of Nader's payments to VRE were Metrocheks. From July 2004 to June 2005, 99.2 percent of the payments were Metrocheks. From July 2005 to June 2006, the ratio rose to 99.8 percent.
In recent months, Nader's has reported a "normal" ratio of cash to Metrocheks, according to the search warrant.
Part of Funk's job involved visiting Nader's to collect Metrocheks. In October of 2005, Milner wrote, Funk credited Nader's account with $71,000 worth of Metrocheks. But there is no record that VRE ever received the checks other than Funk's own entry in the book.
The affidavit states that the other VRE vendors' records are "copious, clear and complete but significantly lacking regarding Nader's."
Funk's personal cell phone records show she had numerous phone conversation with someone at Nader's Grocery during 2005, according to the search warrant.
Her co-workers noticed she was living a tad extravagantly for someone earning $40,000 a year.
While she worked at VRE, she carried Prada and Coach purses, bought a condominium in Cancun, Mexico, and purchased a Pontiac for her son, according to the search warrant. Funk told co-workers the designer bags were a gift from Kang.
She also spent several thousand dollars on a vacation in Cozumel, Mexico, and began paying for lunch and other office expenses in cash, according to the warrant. After she was fired, when she had no apparent income, she attended a pet school with $7,800 tuition.
Mark Roeber, VRE's manager of government relations and public affairs, did not return several calls for comment yesterday.
Nader's Grocery was still listed as a Metrochek vendor on VRE's Web site yesterday.
A VRE weekly report dated June 4, 2002, featured Funk. It said she'd come to VRE after working for 15 years for Giant Food. She previously attended culinary school in Pennsylvania before moving to Northern Virginia.
She said in the article that she hoped to earn enough money so that she and her husband might one day open their own catering business.
To reach KEITH EPPS:
Email: kepps@freelancestar.com