Five Indicted on Wire Fraud Conspiracy, Misapplication of Bank Funds, and Money Laundering Charges
|U.S. Attorney’s Office April 10, 2012|
ASHEVILLE, NC—A federal grand jury sitting in Asheville indicted five individuals with wire fraud conspiracy, misapplication of bank funds, and money laundering charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by Chris Briese, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
The criminal bill of indictment filed on April 4, 2012 charged Avery Ted “Buck” Cashion, III, 58, of Lake Luke, North Carolina; Joan Lusk Cashion, 55, of Lake Luke; Raymond M. “Ray” Chapman, 54, of Brevard, North Carolina; Thomas E. “Ted” Durham, Jr., 57, of Fletcher, North Carolina; and Keith Arthur Vinson, 53, of Asheville, North Carolina, with wire fraud conspiracy, misapplication of bank funds, and conspiracy to commit money laundering. Avery Cashion, Chapman, Durham, and Vinson were also charged with money laundering. Vinson also faces four counts of wire fraud.
The indictment alleges that beginning in 2008, Vinson, Durham, Chapman, and Joan and Avery Cashion devised a scheme to commit wire fraud. According to allegations contained in the indictment, the scheme involved obtaining money from several community banks through a series of straw borrower transactions. A straw borrower is an individual whose name appears on a loan and on the books and records of a bank as the beneficiary of a loan, but whose name is substituted for that of the true borrower’s and does not, in fact, receive the benefits of the loan. Lending institutions cannot properly assess the risk of making such loans as they do not know the true circumstances of the loans or the creditworthiness of the true borrowers. The co-conspirators devised this scheme in order to funnel monies to Vinson and his failing development of Seven Falls, a golf course and luxury residential community in Henderson County, North Carolina.
The indictment alleges that in order to advance this scheme, Vinson, Chapman, and Avery Cashion recruited local bank officials including Ted Durham, who at the time was the president of Pisgah Community Bank, to fund straw borrower loans. The indictment alleges that when bank officials realized that they had reached their legal lending limits with respect to some of the straw borrowers, additional straw borrowers were recruited to the scheme and more straw borrower loans were made to them. According to the indictment, it became necessary to recruit others to be straw borrowers in order to cure legal lending limit violations with respect to the original straw borrowers. The indictment alleges that additional straw borrower loans were also necessary to keep loans current, a scheme known as “loan kiting.” The loan kiting scheme became necessary when conspirators were unable to make payments on loans made early in the scheme.
The defendants made their initial appearances in U.S. Magistrate Court in Asheville today. The maximum statutory penalty for wire fraud conspiracy is a maximum of 30 years’ imprisonment and a fine of $1 million. The maximum penalty for each count of misapplication of bank funds is 30 years’ imprisonment and a fine of $1 million. The maximum penalty for each count of misapplication of bank funds is 30 years’ imprisonment and a fine of $1 million. The maximum penalty for each count of wire fraud is 30 years’ imprisonment and a fine of $1 million. The maximum penalty for conspiracy to commit money laundering is 10 years’ imprisonment and a fine of $250,000. The maximum penalty for each count of money laundering is 10 years’ imprisonment and a $250,000 fine. The defendants have been released on bond pending trial.
The details contained in this indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigation is being jointly handled by the FBI and IRS. The case is being prosecuted by Assistant United States Attorney Corey Ellis of the U.S. Attorney’s Office in Asheville.