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Chig Cagle sentenced to house arrest, probation
By Lynn Hotaling
A federal judge last week pronounced sentence on two Sylva residents and an Asheville banker, bringing an end to the case that helped land prominent Sylva attorney Tom Jones in prison for four years.
Chief Federal Judge Graham Mullen Jan. 27 sentenced Chig Cagle, Sylva's former Ford dealer, to three months' home detention and two years' probation. Cagle pleaded guilty Sept. 11, 2001, to two counts of conspiracy to commit bank fraud and conspiracy to commit money laundering.
Cagle's testimony was key during Jones' April 2003 trial, which ended with Jones' conviction on charges of aiding and abetting bank fraud and conspiracy to commit bank fraud.
Actions taken by Cagle and Jones, with assistance from former Blue Ridge Savings Bank President Hayes Martin, who pleaded guilty to the same charges June 6, 2001, cost Blue Ridge more than $1.3 million in fraudulent loans during the early 1990s. The crimes were discovered by federal banking authorities when they discovered loans made to Cagle violated the loan-to-one-borrower rule, which had been set at $500,000 per customer.
After securing a $500,000 loan, Martin suggested Cagle put property in family members' names to be used as collateral for additional loans, according to federal prosecutors.
Cagle had Jones prepare necessary documents in March 1993 to put property in the name of his daughter and son-in-law, Cheri and Jaime Espinosa. These holdings were then used by Cagle to borrow additional funds, with the proceeds going to Cagle rather than to the Espinosas. According to prosecutors, Cagle had forged the Espinosas' signatures, and Jones knew it.
Cagle also sought Jones' help in January 1993 in refinancing the loan, which allowed Cagle to secure additional funds in violation of federal law. Instead of closing on the loan in the traditional manner, Jones endorsed the loan check and returned it to Martin, who then disbursed the funds to Cagle, the government said.
Blue Ridge was founded by U.S. Congressman Charles Taylor, R-Brevard. Cagle is a former Jackson County Republican Party chairman and a longtime contributor to Taylor's campaigns.
Judge Mullen sentenced Martin last week to six months' house arrest and two years' probation for his role in the crimes.
Mullen, who is based in Charlotte, presided over sentencing in Asheville, according to Assistant U.S. Attorney Richard Edwards. Typically the cases would have been heard by Federal Court Judge Lacy Thornburg of Webster, Edwards said, but Thornburg recused himself because of his long acquaintance with Cagle.
Also sentenced Jan. 27 was Brenda Seagle, Jones' former legal secretary, who pleaded guilty to a single count of aiding and abetting in the misappropriation of Veterans Affairs' funds. Seagle will serve three months' home detention and two years' probation, Edwards said.
Seagle's crime occurred in connection with Jones' embezzlement of funds from the guardianship account of Woodrow Justice, a mentally disabled World War II veteran. Jones was appointed Justice's guardian in 1969. Jones pleaded guilty last July to taking more than $300,000 from Justice's account between 1986 and 2000.
According to the original indictment, Seagle kept the ledgers and account records and prepared many of the checks and false annual accounting forms at Jones' direction.
Jones' federal crimes of bank fraud, money laundering and embezzlement were combined for sentencing, and Judge Mullen last October sentenced him to 51 months in prison. Jones also pleaded guilty to state embezzlement charges stemming from his theft from the Justice trust fund, and in October was given a four-year sentence by Superior Court Judge Clarence Horton, who ordered Jones serve that time concurrently with his federal sentence.
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