Friday, September 12, 2008
Giles man pleads guilty to fraud, points at co-defendant
Frank Graham Farrier Jr., one of two Giles County investment advisers charged in a fraud scheme that cost their clients millions of dollars, switched his plea to guilty this afternoon in federal court in Roanoke.
Farrier, 64, of Newport was one of two principals in Mountain Investments and Dogwood Farms, two companies who prosecutors say were nothing more than a Ponzi scheme, using investors’ money to pay earlier investors as well as the men’s personal expenses.
The other defendant named in last year’s 42-count indictment on fraud, money laundering and other charges is former Giles County Commissioner of the Revenue and Circuit Court Clerk Ted James Johnson Jr., 58, who has maintained his innocence.
Today in court, Farrier pleaded guilty to six charges, apologized to those he'd hurt, and pointed at Johnson as the swindle's more active partner.
Taking the witness stand, Farrier testified he was the bookkeeper in the scheme and that Johnson made the commodity trades that lost investors' money. He said that Mountain Investments never turned a profit.
Farrier said he and Johnson would woo potential investors by bringing them to a “trading room” in Johnson’s house, showing off computer monitors that seemed to show trading activity.
In exchange for Farrier's plea to the six fraud, money laundering, trading violation and forfeiture charges, prosecutors agree to drop the remaining charges when he is sentenced. Prosecutors said they may ask for a lighter sentence than guidelines call for if Farrier assists their case. U.S. District Judge Samuel Wilson directed the federal probation office to prepare a pre-sentencing report that will lay out a recommended penalty for Farrier.
The indictment said that since 1992, more than 80 people invested money with Johnson and Farrier, who promised rates of return of 17 percent to 25 percent or more. Neither man nor company was properly registered to conduct the sorts of transactions they told investors they would carry out, the indictment said.
The Virginia State Corporation Commission began investigating Farrier and Johnson in 2001 after receiving a complaint about a newspaper ad that promised a 14 to 17 percent yield on investments.
In 2004, Johnson, Farrier and Dogwood Farms declared bankruptcy, listing debts to investors of more than $8 million. The SCC said its attempts to make them repay investors had failed and a federal investigation began.
A sentencing date for Farrier has not been set. A trial for Johnson is scheduled to begin Sept. 29.
Farrier, 64, of Newport was one of two principals in Mountain Investments and Dogwood Farms, two companies who prosecutors say were nothing more than a Ponzi scheme, using investors’ money to pay earlier investors as well as the men’s personal expenses.
The other defendant named in last year’s 42-count indictment on fraud, money laundering and other charges is former Giles County Commissioner of the Revenue and Circuit Court Clerk Ted James Johnson Jr., 58, who has maintained his innocence.
Today in court, Farrier pleaded guilty to six charges, apologized to those he'd hurt, and pointed at Johnson as the swindle's more active partner.
Taking the witness stand, Farrier testified he was the bookkeeper in the scheme and that Johnson made the commodity trades that lost investors' money. He said that Mountain Investments never turned a profit.
Farrier said he and Johnson would woo potential investors by bringing them to a “trading room” in Johnson’s house, showing off computer monitors that seemed to show trading activity.
In exchange for Farrier's plea to the six fraud, money laundering, trading violation and forfeiture charges, prosecutors agree to drop the remaining charges when he is sentenced. Prosecutors said they may ask for a lighter sentence than guidelines call for if Farrier assists their case. U.S. District Judge Samuel Wilson directed the federal probation office to prepare a pre-sentencing report that will lay out a recommended penalty for Farrier.
The indictment said that since 1992, more than 80 people invested money with Johnson and Farrier, who promised rates of return of 17 percent to 25 percent or more. Neither man nor company was properly registered to conduct the sorts of transactions they told investors they would carry out, the indictment said.
The Virginia State Corporation Commission began investigating Farrier and Johnson in 2001 after receiving a complaint about a newspaper ad that promised a 14 to 17 percent yield on investments.
In 2004, Johnson, Farrier and Dogwood Farms declared bankruptcy, listing debts to investors of more than $8 million. The SCC said its attempts to make them repay investors had failed and a federal investigation began.
A sentencing date for Farrier has not been set. A trial for Johnson is scheduled to begin Sept. 29.
.....Advertisement.....
