Investigations into the alleged “fraudulent business practices” of the former inn operator in Blacksburg are ongoing

BLACKSBURG, Va. (WDBJ) – An investigation is ongoing into a Blacksburg bed and breakfast that overbooked at least 45 families for Virginia Tech’s graduation weekend in May and then canceled the reservation without refund.

Our Target 7 report found that the Clay Corner Inn had not paid taxes to the city of Blacksburg for at least two years. Now the owner of the building is taking over the business and ending the Clay Corner Inn’s lease.

Pawel Nazarewicz said he had no involvement in management during the overbookings. Instead, he focused on his work as a teacher at Salem High School, Nazarewicz said.

“We are brand new owners, we are a new management team,” Nazarewicz said. “The previous owners have no connection to the Blacksburg Bed and Breakfast and we have very limited information (on the overbookings).”

The business is now known as the Blacksburg Bed and Breakfast. The owner is still working on future overbookings made under the old management and refunding them on a case-by-case basis.

But he’s not the only one with work to do. Authorities are currently investigating complaints about the Clay Corner Inn and its former manager, Joshua Roseberry.

Blacksburg police confirmed the investigation is ongoing but did not provide further details. The number of complaints filed with the Virginia Attorney General’s Office has risen to 15 in the last month.

Officials are also investigating Roseberry’s bankruptcy filings and his previous criminal record.

Many of the families who booked a room at the Clay Corner Inn for Virginia Tech’s 2024 graduation weekend paid thousands of dollars in advance to Roseberry via Venmo, only to have their reservation canceled days before their students’ performance.

Some already paid in October 2023.

Federal documents show that Roseberry filed for bankruptcy in the fall of 2023 with debts totaling $167,130. The two largest claims involve a debt collection agency and PayPal, the company that owns Venmo.

Our Target 7 investigation found that Roseberry was ordered to pay $304,955 in restitution for setting fire to a Radford church in 2005. Radford courthouse records show that amount has not been paid, and the most recent receipt from 2021 shows Roseberry is still owed at least $292,247.50.

In a recent federal court filing in June, a U.S. trustee referred to Target 7’s investigation into the Clay Corner Inn and how he learned of Roseberry’s restitution demands. Roseberry had not included his restitution debt in the original bankruptcy filing, and there is no indication he agreed to make payments during the proceedings.

“The debtor’s Chapter 13 plan does not provide for repayment of compensation,” the document states.

The trustee filed a motion to convert the case from Chapter 13 bankruptcy to Chapter 7. Under Chapter 13 bankruptcy, a debtor can enter into a payment plan to pay off his debts.

“A particular benefit of Chapter 13 is that it offers individual debtors the opportunity to save their homes from foreclosure by allowing them to ‘catch up’ on past-due payments through a payment plan,” according to information from the U.S. courts. “A Chapter 7 bankruptcy does not involve the filing of a repayment plan as in Chapter 13. Instead, the bankruptcy trustee collects and sells the debtor’s non-exempt assets and uses the proceeds from those assets to pay claim holders (creditors) under the provisions of the Bankruptcy Code.”

The trustee further alleged in his motion that Roseberry was using the bankruptcy case as a shield from compensation payments and as a shield for “ongoing deceptive business practices” at the Clay Corner Inn.

“The debtor’s involvement in overbooking rooms, collecting security deposits and allegedly failing to repay those deposits indicates continued fraudulent business practices while using the bankruptcy case as a shield from the collection of its debts,” the document said.

The Clay Corner Inn’s parent company, River Rose LLC, was dissolved by the Virginia State Corporation Commission. The Roseberrys voluntarily wound up their business nearly two weeks after the mass overbooking.

We are still working to get answers from the Attorney General’s Office about what this means for people who are still waiting for refunds.

Previous reviews of the Clay Corner Inn can be found here.

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