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By Lisa Majors-Duff
Two Sylva men this week are learning the consequences of defrauding
an Asheville bank of more than $1 million some 10 years ago.
Chig Cagle, owner of the Sylva Ford dealership for some 25 years
and former chairman of the Jackson County Republican Party, was
scheduled to be sentenced Wednesday in a Charlotte federal court
for his effort to defraud Blue Ridge Savings Bank of $1.3 million
during the early 1990s. Sentencing results were not available
at press time.
In accordance to an agreement he entered into with federal authorities
in Sept. 2001, Cagle pleaded guilty to bank fraud and conspiracy
to commit money laundering and agreed to testify against his real
estate attorney, Tom Jones of Sylva.
Based in part on Cagle's testimony, Jones was convicted by a federal
jury in April of aiding and abetting bank fraud and conspiracy
to commit bank fraud. He voluntarily agreed to have his law license
suspended on an interim basis, according to officials with the
N.C. State Bar in Raleigh.
Jones was notified of the suspension order by the State Bar's
Disciplinary Hearing Commission last week, around the same time
he learned that post-trial motions he filed in April alleging
federal prosecutors were protecting Congressman Charles Taylor,
Blue Ridge Savings' founder and its board chairman, for the part
he played in the illegal loans made to Cagle, had been denied.
"An interim order suspending (Jones's) license was entered
with his consent pending a hearing on charges of misconduct,"
said State Bar attorney Fern Simeon. "The order also states
that the State Bar is investigating Jones for mishandling fiduciary
funds in accounts he maintains as a guardian for others."
Action taken by Cagle and Jones, with assistance from then-Blue
Ridge Saving President Hayes Martin, who has also pleaded guilty
in exchange for his testimony, came to the attention of federal
banking authorities when they discovered Cagle's loans from Taylor's
bank had violated the loan-to-one-borrower rule, which had been
set at $500,000 per customer.
After securing his first $500,000 loan, which he used to pay off
another bank loan, Cagle needed a way to get around the LTOB rule
in order to secure additional funds. That's when Martin suggested
Cagle put property in family members' names to be used as collateral
on additional loans, according to federal prosecutors.
Both Martin and Cagle indicated during their testimony in April
that Congressman Taylor, who has not been charged in connection
with this case, was aware of the amount of the Cagle loans.
In March 1993 Cagle had Jones prepare the necessary documents
to put property in his daughter and son-in-law's name, Cheri and
Jaime Espinosa. These holdings were then used by Cagle to secure
another loan, with the proceeds going to Cagle, not the Espinosas.
The problem, according to federal prosecutors, was that Cagle
had forged the Espinosas' signatures on the deed of trust and
Jones knew it.
Cagle again asked for Jones's help in January 1993, when the loan
was refinanced, allowing 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.
A sentencing date for Martin has not been set.
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