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By Lisa Majors-Duff
While awaiting sentencing on federal bank fraud convictions, former
Sylva attorney Tom Jones was charged Wednesday with more than
30 additional state and federal crimes involving money laundering
and embezzlement.
During a press conference in Asheville Oct. 8, U.S. Attorney Robert
Conrad and Mike Bonfoey, district attorney for the 30th Judicial
District, announced that Jones will face 14 state charges of embezzlement
and 20 federal charges, including conspiracy to commit theft of
government funds, misappropriation of federal money, mail fraud
and money laundering.
"The alleged embezzlements were discovered during the first
week of August, and the criminal investigation began immediately,"
Bonfoey said. "Both state and federal law enforcement agencies
have been involved in the investigation."
State indictments against Jones were issued by the Jackson County
Grand Jury Sept. 30 and sealed until the federal grand jury met
in Asheville Oct. 6, Bonfoey said. Both sets of indictments were
released Wednesday, at about the same time SBI and FBI officers
were set to arrest Jones in Sylva.
The indictments charge Jones with embezzling more than $300,000
from the guardianship account of Woodrow W. Justice, a mentally-disabled
veteran of World War II. Jones was appointed by a Superior Court
judge in 1969 to serve as Justice's guardian and began taking
money from the guardianship account in at least March 1986.
"(Jones) continued to steal from the veteran through December
2000," federal authority alleged. "The total amount
Jones stole from the veteran's account is alleged to be approximately
$334,350."
A majority of the money in the guardianship account consisted
of disability payments from the Veterans Administration and later
the Department of Veterans Affairs.
The indictments further allege that Jones committed his fraudulent
scheme by writing checks to himself out of the veteran's account,
frequently putting the false notation on the checks that they
were for "partial commissions," even though Jones was
also receiving actual commissions for handling the account.
Jones then deposited these checks into his personal, business
or attorney trust accounts. In December 1993, according to the
indictments, Jones cashed a certificate of deposit worth $163,170,
which was also held in guardianship for Justice. Jones converted
that money to his own use, as well, federal authorities say.
Jones was required to submit an annual accounting to the Jackson
County clerk of court and to the VA. To facilitate his scheme,
authorities say, Jones falsely certified that an amount of cash
far in excess of the true figure was in various accounts he maintained
for the veteran.
Also indicted federally was Jones's legal secretary, Brenda Seagle,
who went to work for Jones in the mid-1980s and remained in his
employment through April. Seagle, the indictment alleges, kept
the ledgers and account records for these accounts and prepared
many of the checks and false annual accounting forms at Jones's
direction.
Like Jones, Seagle is charged with conspiracy to embezzle money
paid by the VA on behalf of a claimant, mail fraud, embezzlement
of VA funds, conspiracy to commit money laundering and money laundering.
In the federal indictment, the first conspiracy count carries
a maximum five-year sentence, as does the embezzlement of VA funds.
Mail fraud also carries a five-year maximum, while each count
of money laundering carries a 20-year maximum.
On each state count of embezzlement, Jones could receive a maximum
sentence of 10 years in prison.
"This fraud, which was only discovered in August, has been
brought to a speedy resolution because of the combined efforts
of state, local and federal law enforcement," Conrad said
Wednesday. "My office will continue to work cooperatively
with the local district attorney in rooting out the fraudulent
acts of corrupt individuals, especially those such as attorneys
who abuse their positions of trust to commit their crimes."
According to Conrad, "the worst type of fraud is that committed
by an individual who steals from the very people whose finances
they are entrusted to safeguard."
Should Jones fail to post bond, the amount of which was unknown
at press time Wednesday, his first court appearance could come
as early as today (Thursday) in Macon County, Bonfoey said.
Jones, whose law license was suspended by the N.C. State Bar Aug.
8, was convicted by a federal jury in Bryson City in April on
charges of bank fraud, making false statements to a federally-insured
bank and conspiracy to commit those crimes. Those convictions
involved fraudulent real estate transactions Jones undertook on
behalf of Chig Cagle, Sylva's former Ford dealer.
Cagle pleaded guilty in September 2001 to defrauding Blue Ridge
Savings Bank, which was founded by U.S. Congressman Charles Taylor,
R-Brevard, of more than $1 million in the early 1990s. Cagle,
a former Jackson County Republican Party chairman, was a financial
supporter and campaigned for Taylor through the years.
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